Let's now apply these concepts to Sunchaser Shakery. Nicholas sold his 30 percent interest in Sunchaser Shakery Partnership. The balances at the time of the sale are listed in the table. Determine the buyer's share of inside basis if Sunchaser elects section 754 at the time of the sale. So, recall that basis is not adjusted as a result of a partnership interest transfer, unless there is a section 754 election. And so, in this case, we have to factor that in because we are told that election is in play. So, we have to look at what's the buyer's increases in their basis. And, we do that by looking at Nicholas's capital account, which has a fair market value of $90,000. We compare that now to his share of the partnership assets, which has an adjusted basis of $225,000 in total. And he's a 30 percent partner, so $67,500 is his share. So, it's this difference that we're concerned with. And given that section 754 has been elected in this case, this difference is now allocated to the assets on the basis of relative appreciation. So, looking at the inventory, it's basis is $105,000 and it's fair market value is $110,000, it has appreciated $5,000. So, we're going to use that appreciation as a relative basis to determine how much of the $22,500 of section 754 adjustment, to allocate. Similarly, the land has a basis of $70,000 and a fair market value of $140,000 and thus, it has appreciated by $70,000. So, for the inventory, the $5,000 appreciation over the $70,000 and the $5,000 appreciation of all the assets, that proportion is what we'll multiply by the amount we want to adjust, the $22,500. In other words, we'll assign $1,500 to inventory, and for the land, $70,000 over $5,000 plus $70,000, the remaining portion or $21,000. So, to determine the basis, the inventory basis began at $105,000, Nicholas's share is 30 percent plus the $1,500 adjustment that we computed above. Means that the buyer share of inside basis for this particular asset is $33,000. For the land, it has a basis of $70,000, the interest that we're concerned with is 30 percent plus the $21,000 adjustment from above, means that the basis is $42,000. And then just for completeness, we can show that the basis in the final asset is $15,000 cash.