Ted purchased a one-third capital and profits interest in a ptrsp for $22,000. At the time of the purchase a Sec. 754 election to make an optional basis adjustment was in effect. At the time of Ted's purchase the balance sheet was as follows: 

BASIS FMV cash $ 5,000 $ 5,000 accounts receivable 10,000 10,000 inventory 20,000 20,000 depreciable assets 20,000 41,000 Total $55,000 $76,000 Liabilities and Capital Liabilities $10,000 $10,000 Ted's capital 15,000 22,000 Partner 2's capital 15,000 22,000 Partner 3's capital 15,000 22,000 Total $55,000 $76,000. 

How much is the Sec. 754 basis adjustment and where is it allocated?