On March 17, Year 1, James became a partner in Llamas & Giraffa Co., an already formed partnership. James does not have property to contribute and thus contributes services in exchange for his 5% profits and capital interest in Llamas & Giraffa. Llamas & Giraffa's net assets are as follows: Date January 1, Year 1 Basis Fair Market Value $ 150,000 $ 130,000 March 17, Year 1 $ 150,000 $ 150,000 June 30, Year 1 $ 150,000 $ 170,000 December 31, Year 1 $ 150,000 $ 175,000 On James's Year 1 tax return, what amount must James include as ordinary income, if any, from the transfer of the partnership interest? a. $7,500 b. $0 c. $8,750 d. $8,500