Rockwell sells lands (adjusted basis od $40,000 and a fair market value of $60,000) to RW Partnership for $20,000. The partnership holds the Land as inventory for resale in the nor al 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 Capital gain of $40,000 Ordinary income of $40,000