The ABC general partnership has the following assets: I/S Basis Book FMV Cash $ 1,800 $ 1,800 $ 1,800 

Inventory 14,400 14,400 13,800 

Land 19,680 19,680 38,640 

$ 35,880 $ 35,880 $ 54,240 

The Land is a capital asset in the hands of the ABC partnership. The total partnership liabilities are $12,000. C's book capital account balance was equal to $7,960 and his outside basis in his partnership interest was equal to $11,960 after taking into consideration C's $4,000 share of partnership liabilities. N acquires C's interest in the partnership by delivering to him a check in the amount of $14,080 and assuming C's share of the partnership's liabilities. Assume that the partnership made a section 754 election triggering a section 743(b) adjustment. 

a) What is the amount of any gain or loss to be recognized by C as a result of the sale of his interest to N? 

b) The character of C's gain is $ _________ of ordinary income (loss) and $__________ of capital gain (loss). 

c) N's outside basis in her partnership interest is equal to $__________ 

d) N's book capital account balance is equal to $ _________. 

e) Assume that after N becomes a partner, the partnership sold the inventory for $17,400. What amount should A report as income from the sale of inventory?

f) Assume that after N becomes a partner, the partnership sold the inventory for $17,400. What amount should N report as income from the sale of inventory?