Partner L has been a one-third partner in the LUV partnership for four years and has a basis in his partnership interest of $30,000. The partnership owns the following assets:

L sells her partnership interest to R for $50,000. Which response correctly indicates the character of her gain from the sale?

Adjust basis FMV

Cash $50,000 $50,000

Inventory $20,000 $50,000

Land $20,000 $50,000

a. $20,000 ordinary income.

b. $10,000 ordinary income and $10,000 long-term capital gain

c.$20,000 capital gain.

d. $20,000 ordinary income and $10,000 long-term capital gain.