Mr. Grill contributed equipment on August 1 of the current year to the Charcoal Partnership in exchange for a 30% interest. At the date of contribution, the equipment had an adjusted basis of $8,000 and FMV of $12,000. Grill had purchased the equipment for $15,000. The equipment was subject to a $20,000 mortgage, which was assumed by the partnership. What is the amount of gain that Grill must recognize on the transfer?