Recognition of capital or ordinal loss in business

Steve sells his 20% partnership interest having a $28,000 basis to Nancy for $40,000 cash. At the time of the sale, the partnership has no liabilities and its assets are as follows.

Basis FMV
Cash $20,000 $20,000
Unrealized receivables -0- 40,000
Inventory 10,000 40,000
Land (Sec. 1231) 110,000 100,000

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The receivables and inventory are Sec. 751 assets. There is no agreement concerning the allocation of the sales price. Steve must recognize
A) no gain or loss.
B) $12,000 ordinary income.
C) $12,000 capital gain.
D) $14,000 ordinary income and $2,000 capital loss.

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