2.9 Partnership ABC is an equal partnership formed December 31, year 1 , with a $90,000 cash contribution by each partner. Its tax year is the calendar year. The partnership spends year 2 setting up its production facility and producing inventory for sale the next year. It realizes no income. On January 1 , year 3 , its balance sheet, expanded to show the fair market values of its assets, is as follows: The partnership computes depreciation on its plant on a straught-lne basis, so no recapture under section 1250 would occur on its sale; gain equal to the depreciation taken would, however, be classified as "section capital 1250 gain." On January 1, year 3, A, who is a corporate lawyer, sells her partnership interest to D for $120,000 in cash. What is the amount and character of A's gain or loss? a) Ordinary loss, $9,000; section 1250 capital gain, $0; capital gain, $39,000 b) Ordinary loss, $10,000; section 1250 capital gain, $1,000; capital gain, $39,000 c) Ordinary loss, $10,000; section 1250 capital gain, $1,000; capital gain, $29,000 d) Ordinary loss, $10,000; section 1250 capital gain, $10,000; capital gain, $30,000