Kumar's interest in the equal Moss Partnership is sold to Charles for $100,000 cash.  On the date of the sale, the partnership tax balance sheet and the agreed fair market values were as follows.

                                                                             Adjusted   Basis                     FMV          

             Cash                                                              180,000                       1800,000         

             Inventory                                                       200,000                       100,000

            Other assets                                                   100,000                      120,000

                                                                                  $480,000                     $400,000

            Kumar, capital                                             $ 120,000                     $100,000

            Patterson, capital                                            120,000                       100,000

            Keegan, capital                                              120,000                       100,000

            Benedict, capital                                           120,000                       100,000

                                                                                  $480,000                     $400,000

Assume Kumar's basis for his partnership interest equals his capital account.  As a result of the sale, Kumar recognizes

a.       No gain or loss.

b.       $20,000 capital loss.

c.   $25,000 ordinary loss.

d.   $20,000 capital gain.

e.   $25,000 ordinary loss and $5,000 capital gain.