ABC, an equal three-person cash basis partnership, has cash of $3,000 and securities of $48,000 (FMV) with an adjusted basis of $30,000 to the partnership. Assume that C sells her interest to D for $17,000. If the new partnership subsequently sells the securities at their FMV of $48,000, what must partner B include in taxable income if a Section 754 election is in effect?

$0

$1,000 loss

$6,000 gain

$16,000 gain