A partnership was started six years ago, and all of the partners contributed cash. One partner, Nancy, contributed cash and real property. At the time of the contribution, the fair market value of the property was $30,000. Nancy had originally bought the property for $25,000. During 2022, the partnership decided it no longer wanted this property. The property, which now had a FMV of $55,000, was distributed to another partner, Joshua. Each partner had a 20% interest in partnership property at the beginning of 2022. Which of the following statements describes the correct tax treatment in 2022 of the property Nancy contributed to the partnership at its inception?

a) Since this is a regular distribution to Joshua, no gain or loss is recognized.

b) Since the partnership owned the property, Nancy will not recognize a gain or loss for 2022.

c) Nancy will recognize a $5,000 gain on the property.

d) Nancy will recognize a $25,000 gain on the property.