10- Partner S has been a one-third partner in the STU partnership for 12 years and has a basis in her partnership interest of $120,000. The partnership owns the following assets:

Adjust basis FMV

Cash $130,000 $130,000

Inventory $80,000 $110,000

Land $80,000 $95,000

Collectibles $70,000 $85,000

S sells her partnership interest to W for $140,000. Which response correctly indicates the character of her gain from the sale?

$20,000 15% long-term capital gain (LTCG).

$10,000 ordinary income and $10,000 15% long-term capital gain.

$10,000 ordinary income, $5,000 15% LTCG, and $5,000 28% LTCG.

$20,000 ordinary income.