Jangyoun sells investment land having a $30,000 basis to a partnership
in which he has a 60% partnership interest. The partnership pays $26,000 (FMV) for the land. Later,
the partnership sells the investment land to a nonpartner for $31,000. On the sale of the land, the
partnership must recognize a
A.
$4,000 capital gain and $1,000 Sec. 1231 gain.
B.
$5,000 capital gain.
C.
$0 gain or loss.
D.
$1,000 capital gain.