Cynthia Sells Her 1/3 Interest in the CAR Partnership to Brandon

Multiple Choice

Cynthia sells her 1/3 interest in the CAR Partnership to Brandon for $95,000 cash. On the date of sale, the partnership balance sheet and agreed-upon fair market values were as follows: $\begin{array}{lrr}&\text { Adjusted}\\&\text { Basis}&\text { FMV}\\\text { Cash } & \$ 40,000 & \$ 40,000 \\\text { Receivables } & -0- & 60,000 \\\text { Land } & \underline{50,000} & \underline{125,000} \\\text { Total } & \mathbf{\$ 9 0 , 0 0 0} & \mathbf{\$ 2 2 5 , 0 0 0}\\\\\text { Cynthi a capital } & \$ 30,000 & \$ 75,000 \\\text { Arnold, capital } & 30,000 & 75,000 \\\text { Ralph, capital } & 30,000 & 75,000 \\\text { Total } & \underline{\mathbf{\$ 90,000}} & \underline{\mathbf{\$ 2 2 5}, 000} \\\end{array}$
If the partnership has a § 754 election in effect, the total "step-up" in basis of partnership assets that will be allocated to Brandon is:

A) $75,000.
B) $65,000.
C) $45,000.
D) $20,000.
E) $0.