Tarrington and Xavier are 60/40 partners in the TX Partnership, a cash basis tax entity with the following balance sheet: On the balance sheet date, the Section 1231 assets have a depreciation recapture potential of $25,000. Also on the balance sheet date, Tarrington purchases Xavier's 40% interest in the partnership, paying Xavier $204,000 in cash and assuming Xavier's share of the partnership liabilities. As a result of this buyout of his partnership interest, what is the ordinary gain on sale that Xavier should report on his individual tax return? $52,500 $50,000 No ordinary gain will be reported $40,000 Tarrington and Xavier are 60/40 partners in the TX Partnership, a cash basis tax entity with the following balance sheet: On the balance sheet date, the Section 1231 assets have a depreciation recapture potential of $25,000. Also on the balance sheet date, Tarrington purchases Xavier's 40% interest in the partnership, paying Xavier $204,000 in cash and assuming Xavier's share of the partnership liabilities. As a result of this buyout of his partnership interest, what is the ordinary gain on sale that Xavier should report on his individual tax return? $52,500 $50,000 No ordinary gain will be reported $40,000