Ray is a one-third partner in RJS partnership. Ray's outside basis is $44,000 which consists of $16,000 in capital contributions & $28,000 of his share of partnership debts. He sells HALF his partnership interest to Sylvie for $56,000 cash.

Which of the following statements is FALSE regarding the tax consequence of the above facts?

A. Ray will recognize a $48,000 gain on the sale of half his partnership interest to Sylvie.

B. Ray could have significantly reduced his taxable gain if Ray had taken a partnership distribution of $56,000 rather than sell half his interest to Sylvie for $56,000.

C. When a partner sells only part of his partnership interest, the partner recognizes gain to the extent the selling price exceeds his tax basis in the portion of the partnership interest which is sold.

D. All of the above statements are TRUE!