The December 31,2008,balance Sheet of the DIP Partnership Reads as Follows

Multiple Choice

The December 31,2008,balance sheet of the DIP Partnership reads as follows.

Each partner shares in 1/3 of the partnership capital,income,gain,loss,deduction and credit.Capital is not a material income-producing factor to the partnership.On December 31,2008,general partner Dana receives a distribution of $120,000 cash in liquidation of her partnership interest under § 736.If Dana's outside basis for the partnership interest immediately before the distribution is $90,000,the recognized taxable gain and ordinary income from the distribution is:

A) $30,000 ordinary income.
B) $30,000 capital gain.
C) $10,000 capital gain; $20,000 ordinary income.
D) $20,000 capital gain; $10,000 ordinary income.
E) None of the above.