an interesting question for which I cannot answer with any assuredness. If Section 751 is ordinary income is income in respect of a decedent (IRD) there is no step-up for this, so upon sale this income would need to be recognized for income tax purposes.
In the case of a sale or exchange, Regs. Sec. 1.751-1(a)(1) provides that
To the extent that money or property received by a partner in exchange for all or part of his partnership interest is attributable to his share of the value of partnership unrealized receivables or . . . inventory items, the money or fair market value of the property received shall be considered as an amount realized from the sale or exchange of property other than a capital asset. The remainder of the total amount realized on the sale or exchange of the partnership interest is realized from the sale or exchange of a capital asset under section 741.
