Scott sells his one-third partnership interest to Sally for $43,000 when his basis in the

partnership interest is $33,000. On the date of sale, the partnership has no liabilities and

the following assets:

Assets Basis FMV

Cash $30,000 $30,000

Inventory 12,000 21,000

Building 45,000 60,000

Land 12,000 18,000

The partnership has claimed $5,400 of straight-line depreciation on the building. What

tax issues should Scott and Sally consider with respect to the sale transaction?