(Answered) Question -michelle pays 120000 cash for brittanys one-third

Accounting

Question -

Michelle pays $120,000 cash for Brittany's one-third interest in the Westlake Partnership. Just prior to the sale, Brittany's basis in Westlake is $96,000. Westlake reports the following balance sheet:

	Tax Basis	FMV
Assets:
Cash	$96,000	$96,000
Land	192,000	264,000
Totals	$288,000	$360,000
Liabilities and Capital:
Capital - Amy	96,000
- Brittany	96,000
- Ben	96,000
Totals	$288,000

A. What is Michelle's basis in her partnership interest? What is Michelle's inside basis?

B. If Westlake were to sell the land for $264,000 shortly after the sale of Brittany's partnership interest, how much gain or loss would the partnership recognize?

C. How much gain or loss would Michelle recognize?

D. Suppose Westlake has a §754 election in place. What is Michelle's special basis adjustment

E. Suppose Westlake has a §754 election in place. How much gain or loss would Michelle recognize on a subsequent sale of the land in this situation?

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