Sally is a 25% partner in the STUV partnership. She has a tax basis in her partnership interest of $300,000. Sally also owns some land and a small building that she would like to sell to the partnership. The property has a fair market value of $500,000. Sally purchased the building for $400,000, and after taking MACRS deductions, her tax basis in the building is $350,000.

Q: Do you think the lawyers advice will work? How long do you have to wait? Prepare a memo explaining your reasoning in a clear concise manner citing appropriate primary authority. Your memo should include quotes from the appropriate section(s) of the Code and Income Tax Regulations.