Rockwell owns sixty-five percent (65%) of the capital and profits interest of the RW Partnership. Rockwell sells Land (Adjusted Basis of $40,000 and Fair Market Value of $60,000) to RW Partnership for $20,000. The partnership holds the Land as inventory for resale in the normal course of business. As a result of this transaction, Rockwell has: Ordinary Income of $20,000 and Capital Gain of $20,000. No Recognized Gain or Loss. O Capital Gain of $40,000. Ordinary Income of $40,000