Khalid Contributes Land Fair Market Value of $700,000; Adjusted Basis

Multiple Choice

Khalid contributes land fair market value of $700,000; adjusted basis of $200,000) and Dan contributes $700,000 cash to form Teal Partnership. Both Khalid and Dan own a 50% interest. One year later, Teal sells the land for $800,000. How much gain is recognized by each partner?

A) $600,000 to Khalid, $0 to Dan.
B) $550,000 to Khalid, $50,000 to Dan.
C) $300,000 to Khalid, $300,000 to Dan.
D) $50,000 to Khalid, $50,000 to Dan.