Problem:
On April 10 of the current year, Mr. Simon became a one-fourth partner in Rhyming Partnership by contributing $15,000 cash. The adjusted basis of Simon's partnership interest is $29,000, which includes his one-fourth share of the partnership liabilities for which he, the other partners, and the partnership had not assumed any personal liability. The partnership reported a $56,000 ordinary loss for the current year, and each partner properly claimed his distributive share. The partnership has no other liabilities, unrealized receivables, or substantially appreciated inventory items. On December 31 of the current year, Mr. Simon withdrew from the partnership and was relieved of his share of the partnership's liabilities. What are the amount and the character of Mr. Simon's gain or loss? A. $1,000 capital loss. B. $15,000 ordinary loss. C. $15,000 capital loss. D. $14,000 capital loss.