1.A/R notan ”unrealized receivable” b/c it is includible in incomeunder p’ship’s method of accounting. Because PNS is on the accrual method, therefore PNS will have a basis in the assets. 2.A/R is an “inventory item”b/c it is a non-capital asset. For purposes of our constructive sale. b.Total Gain = $15kc.A’s share = $5kd.A has § 751 ordinary income of $5k2.$45k gain – $5k OI = $40k LTCGiii.(b) What result in (a), above, if the partnership held the inventory as a capital asset, but A is a dealer in that type of property?1.Same result as part (a)2.§ 751(d)(3): “inventory item” includes p’ship property that would be considered property described in (1) or (2) if held by the partnera.If held by A, the property would be property described in § 1221(a)(1) (§ 751(d)(1))iv.(c) What result in (a), above, if the partnership owns no inventory but has a 50% interest in another partnership (partnership #2), whose only assets are inventory with a basis of $150,000 and a value of $180,000?1.Same result as part (a), calculation is the same. ½ 150k (90k) ½ 180k (90k) 2.§ 751(f): in determining whether p’ship property is § 751 property, the p’ship is treated as owning its proportionate share of the property of any other p’ship in which it is a partner.a.P’ship #1 owns 50% of P’ship #2b.P’ship #2 owns inventory—$150k AB; $180k FMVc.Treat P’ship #1 as owning inventory w/ $75k AB and $90 FMVi.Same as in part (a)v.(d) What result in (a), above, if in addition the partnership had a contract worth $30,000 to perform real estate management services for the next ten years?1.STEP TWO(B)a.The contract is a §751 asseti.See Ledoux v. Commissioner (contract to operate dog track was an unrealized receivable under § 751(c)(2) b/c it was a right to pmt for services to be rendered)Treated as an accounts receivable b.