Ray was a one-third partner in RJS partnership until he received a distribution of the following assets form the partnership which reduced his interest in capital & profits of the partnership to zero 0%.

Cash $10,000

Land- w/ basis to the partnership of $40,000 & a fair market value of $100,000

Marketable Securities- w/ basis to the partnership of $20,000 & a fair market value of $30,000

The land was encumbered by a mortgage of $20,000 which Ray assumed upon distribution of the land

Just prior to this distribution, Ray's one-third share of partnership liabilities of $60,000. (Total partnership liabilities were $180,000 at the time of distribution).

How much gain or loss, if any, does Ray recognize on this distribution?

A. Losses cannot be recognized on non-liquidating distributions.

B. $0 gain

C. $30,000 gain

D. $10,000 gain

E. None of the above