(Solution) - Patty pays 100 000 cash for Stan s one third interest in the -(2025 Original AI-Free Solution)

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Patty pays $100,000 cash for Stan?s one-third interest in the STU Partnership. The partnership has a Sec. 754 election in effect. Just before the sale of Stan?s interest, STU?s balance sheet appears as follows:

a. What is Patty?s total optional basis adjustment?
b. If STU Partnership sells the land for its $220,000 FMV immediately after Patty purchases her interest, how much gain or loss will the partnership recognize?
c. How much gain will Patty report as a result of the sale?