Mr.and Ms.Smith's Partnership Owns the Following Assets

Multiple Choice

Mr.and Ms.Smith's partnership owns the following assets:
* Potential § 1245 recapture of $30,000.

** Straight-line depreciation was used.
mr.and Ms.Smith each have a basis for their partnership interest of $135,000. Calculate their combined recognized gain or loss and classify it as capital or ordinary if they sell their partnership interests for $470,000.

A) $200,000 ordinary income.
B) $200,000 capital gain.
C) $100,000 ordinary income and $100,000 capital gain.
D) $90,000 ordinary income and $110,000 capital gain.
E) None of the above.