Tim, a Real Estate Investor, Ken, a Dealer in Securities

Tim, a real estate investor, Ken, a dealer in securities, and Hardware, Inc., a retail lumber store form a partnership called HKT, LP. HKT is in the home building business. Timrecently purchased his interest in HKT while the other partners purchased their interest several years ago. During X3, HKT reports a $12,000 gain from the sale of a stock in a wholesale lumber company it purchased in X1 for investment purposes. Which of the following statements best represents how their portion of the gain should be reported to the partner?

A) Hardware, Inc. - Long-term capital gain.
B) Ken - Ordinary Income.
C) Tim - Short-term capital gain.
D) All of the choices accurately report the gain to the partner.
E) None of the choices accurately report the gain to the partner.