Samantha decides to leave the SRK Partnership after owning the interest for many years. She owns a 52% capital, profits, and loss interest in the general partnership (which is not a service partnership). Samanthas basis in her partnership interest is $ 60,000 just before she leaves the partnership. The partnership agreement does not mention payments to partners who leave the partnership. The partnership has not made an optional basis adjustment election ( Sec. 754). All partnership liabilities are recourse liabilities, and Samanthas share is equal to her loss interest. When Samantha leaves the partnership, the assets and liabilities for the partnership are as follows:

	Partnerships Basis	FMV
Assets
Cash	$120,000	$120,000
Inventory	$12,000	$12,000
Receivables	-0-	$32,000
Land	30,000	50,000
Total Assets	$162,000	$214,000
Liablities	30,000	30,000

Analyze the following two alternatives, and answer the associated questions for each alternative. a. Samantha could receive a cash payment of $ 110,000 from the partnership to terminate her interest in the partnership. Does Samantha or the partnership have any income, deduction, gain, or loss? Determine both the amount and character of any items. b. Rook already owns a 30% general interest in the SRK partnership prior to Samanthas departure. Rook is willing to buy Samanthas partnership interest for a cash payment of $ 110,000. What income, gain, loss, or deduction will Samantha recognize on the sale? What are the tax implications for the partnership if Rook buys Samanthas interest?