Laurie contributed land with a basis of $7,000 and an FMV of $10,000 to the LP Partnership three years ago to acquire her partnership interest. This year, the land is distributed to Paul when its FMV is $12,000. No other distributions have been made since Laurie became a partner. When the land is distributed, the partnership's basis in the land immediately before distribution is increased by

A) $0.

B) $1,000.

C) $3,000.

D) $5,000.