At the Formation of the BD Partnership, Betty Contributes Land

Multiple Choice

At the formation of the BD Partnership, Betty contributes land with a basis of $10,000 and an FMV of $30,000 and Dick contributes cash of $30,000. Betty and Dick share profits and losses equally. When the land is sold two years later for $50,000, Betty must recognize a gain of

A) $10,000.
B) $20,000.
C) $30,000.
D) $40,000.