Dusan is a member of the Tonda LLC, and all members have equal interests in capital and profits. The LLC has made an optional adjustment-to-basis election. Dusan’s interest is sold to Adele for $35,000. The balance sheet of the LLC immediately before the sale shows the following:

a. How much is the § 754 adjustment?

b. What is the amount of Adele’s basis in the acquired interest?

c. Which partners receive deductions related to the step up?

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Basis 40,000 80,000 $120,000 S30,000 30,000 30,000 30,000 $120,000 FMV 40,000 100,000 $140,000 35,000 35,000 35,000 35,000 $140,000 Cash Depreciable assets Dusan, capital Randal, capital Thom, capital Erin, capital