DUM partnership consists of three partners: Danny (25% share), Umberto (50% share), and Martin (25% share). Danny decides to sell his total interest to Imogene. On the date of sale, the partnership had the following:
Basis FMV
Cash $ 10,000 $ 10,000
Accounts receivable 0 8,000
Inventory 16,000 17,600
Land 80,000 100,000
Danny's basis in his partnership interest was $26,500 and the partnership has no liabilities. If he sells his interest for $35,000, what is his gain or loss realized and recognized?