Smith Properties is a real estate partnership that focuses on the acquisition and management of commercial and residential real estate in the Southwestern United States. Edna Zapata has been a partner in the partnership for the past 15 years. This year she decided to sell her partnership interest and focus on other interests. The partnership has the following balance sheets as of the date she sold her interest. Tax Basis FMV Cash and equivalents 250,000 250,000 Real estate portfolio (includes multiple properties) 2,400,000 6,000,000 Other tangible assets 500,000 500,000 Total assets 3,150,000 6,750,000 Tax basis FMV Liabilities (principallu mortgage liabilities on the partnership's real estate portfolio) 1,350,000 1,350,000 Partner capital 1,800,000 5,400,000 Total liabilities and capital 3,150,000 6,750,000 Edna owned a one-third interest in parnership capital and profits. As such , the fair market value of her interest in the partnership was $1,800,000. However, the partnership has a reputation for wise investment and management of properties. The buyer of Edna's interest in the partnership was willing to pay a premium for this expertise. Thus Edna sold her interest in the partnership for $2,000,000. The buyer also assumed resposibility for Edna's one-third share of the partnership's liabilities. The parntership has a Section 754 election in effect. Determine the amount of the parntership's basis adjustment amond the parternship's assets. Assume that all of the partnership's real estate properties are business-use assets which will generate capital gain upon disposition under Code Section 1231. Explain how the excess of the purchase price over the fair market value of the partnership's tangible assets will affect the partnership s post adjustment balance sheet.