Partnership Records Show R Is a 50 Percent Partner

Partnership records show: $\begin{array}{ll}&\text { Inside Basis }&FMV\\\text { Inventory }&\$12,000 & \$28,000 \\\text { Land }&48,000 & 70,000\\\text { Equipment }&32,000&42,000\\\text { Total assets }&\$92,000&\$140,000\end{array}$ R is a 50 percent partner.The equipment has $10,000 of § 1245 recapture potential.R sells her entire interest in the partnership for $70,000.Her basis in the partnership is $50,000.R's $20,000 recognized gain on the sale is

A) All ordinary income
B) All capital gain
C) $8,000 of ordinary income and $12,000 of capital gain
D) $13,000 of ordinary income and $7,000 of capital gain
E) $24,000 of ordinary income and $4,000 of capital loss