What is linda total optional basis adjustment

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Reference no: EM13951876

Linda pays $100,000 cash for Jerry's ¼ interest in the JILL Partnership. The partnership has a Sec. 754 election effect. Just before the sale of Jerry's interest, JILL's balance sheet appears as follows:

	Partnership's Basis	FMV
Assets:
Cash	$75,000	$75,000
Land	$225,000	$325,000
Total	$300,000	$400,000
Partners' capital
Jerry	$75,000	$100,000
Instrument Corp	$75,000	$100,000
Logo Corp	$75,000	$100,000
Lighthouse Corp	$75,000	$100,000
Total	$300,000	$400,000

a. What is Linda's total optional basis adjustment?

b. If JILL Partnership sells the land for its $325,000 FMV immediately after Linda purchases her interest, how much gain or loss will the partnership recognize?

c. How much gain will Linda report as a result of the sale?

Reference no: EM13951876

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