Lars has a basis in his partnership interest in XXL of $100,000. He sells the partnership interest in XXL for $160,000. XXL is a cash-basis partnership which has accounts receivable with a $30,000 fair market value and a zero adjusted basis. Lars's share of these receivables is $10,000. What is the amount and character of the gain that Lars recognizes on the sale of his partnership interest?
A. $10,000 ordinary income and $50,000 capital gain
B. $60,000 capital gain
C. $50,000 capital gain
D. $10,000 ordinary income and $60,000 capital gain
Answer: A
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