On April 1, 2010, George Hart, Jr. acquired a 25% interest in the Wilson, Hart and Company partnership by gift from his father. The partnership interest had been acquired by a $50,000 cash investment by Hart, Sr. on July 1, 2004. The tax basis of Hart, Sr.'s partnership interest was $60,000 at the time of the gift. Hart, Jr. sold the 25% partnership interest for $85,000 on December 17, 2010. What type and amount of capital gain should Hart, Jr. report on his 2010 tax return?
a) A long-term capital gain of $25,000.
b) A short-term capital gain of $25,000.
c) A long-term capital gain of $35,000.
d) A short-term capital gain of $35,000.
Answer: a) A long-term capital gain of $25,000.