Chen Industries, a general partnership, had the following balance sheets at December 31:

Basis FMV

Cash $50,000 $50,000

Inventory 15,000 30,000

Property 2 (Sec. 1231 asset) 20,000 100,000

Property 3 (Sec. 1231 asset) 50,000 75,000

$135,000 $255,000

Liabilities 75,000 75,000

Capital, Sue 30,000 30,000

Captial, Pan 20,000 60,000

Capital, June 10,000 30,000

$135,000 $255,000

Pan owns a one-third interest in partnership capital and profits. His adjusted basis in his partnership interest is $32,500. If he sells his interest to an unrelated buyer for $60,000 cash, how much ordinary income will he recognize on the sale under Code Sec. 751(a)?

a. zero

b. $5,000

c. $10,000

d. $27,500

e. None of the above