James Michaels invested $25,000 for a one-third interest in the Jabo Partnership on January 1 of the current year. The partnership purchased a building site on February 5 at a cost of $200,000, paying $50,000 as a down payment and obtaining a mortgage of $150,000 at 12 percent annual interest for only three years, then full payment of principal. Because of an unexpected rezoning of the property, it substantially increased in value. Jabo Partnership broke exactly even for the current year since their income was exactly the same as their expenses. On December 31 James sold his one-third interest to Joe Hammer, receiving $62,500 in cash. What was James's basis for his interest in the partnership immediately prior to the sale? What was the sales price of the interest? What is the character of James's gain upon the sale of his interest?