Steve Sells His 20% Partnership Interest Having a $28,000 Basis

Steve sells his 20% partnership interest having a $28,000 basis to Nancy for $40,000 cash. At the time sale, the partnership has no liabilities and its assets are as follows: $$\begin{array} { | l | l | l | } \hline & \text { Basis } & \text { FMV } \\\hline \text { Cash } & \$ 20,000 & \$ 20,000 \\\hline \text { Unrealized receivables } & 0 & 40,000 \\\hline \text { Inventory } & 10,000 & 40,000 \\\hline \text { Land (Sec. 1231) } & 110,000 & 100,000 \\\hline\end{array}$$ The receivables and inventory are Sec. 751 assets. There is no agreement concerning the allocation o sales price. Steve must recognize

A) $12,000 capital gain.
B) no gain or loss.
C) $12,000 ordinary income.
D) $14,000 ordinary income and $2,000 capital loss.