Question: Kay and Sam form an equal partnership when Sam contributes cash of $10,000 and Kay contributes land having a basis of $4,000 and FMV of

Kay and Sam form an equal partnership when Sam contributes cash of $10,000 and Kay contributes land having a basis of $4,000 and FMV of $10,000. Two years later the partnership sells the land for $12,000. What is Kay's gain or loss on the transaction?

a. $1,000 gain

b. $7,000 gain

c. $0

d. $10,000 loss

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