The equal XYZ partnership has the following balance sheets:

	Basis	FMV
Property A	$39,000	$54,000
Property B	$60,000	$42,000
Inventory A	$3,000	$15,000
Inventory B	$15,000	$12,000
Totals	$117,000	$123,000
Capital, X	$35,000	$41,000
Capital, Y	$41,000	$41,000
Capital, Z	$41,000	$41,000
Totals	$117,000	$123,000

XYZ has a Code Section 754 election in effect, and X sells her interest to W for $41,000 cash. The two properties are both capital assets. Inventory A was contributed by X at a time when its unrealized appreciation was $6,000. At the time of the transfer, Xs share of the partnerships basis in partnership assets is $35,000.

1. How much is the Code Sec. 743(b) adjustment to each asset?

2. How much income would be allocated to each partner if, one year later, Property A is sold for $60,000?