Newton is a one-third owner of ProRite Partnership. Newton has decided to sell his interest in the business to Betty for $50,000 cash plus the assumption of his share of ProRite's liabilities. Assume Newton's inside and outside basis in ProRite are equal. ProRite shows the following balance sheet as of the sale date

Assets:..............................Tax Basis......................FMV

Cash...................................$ 80,000.................$ 80,000

Receivables..........................25,000...................25,000

Inventory.............................40,000...................85,000

Land.....................................30,000...................20,000

Totals..............................$ 175,000...............$ 210,000

Liabilities and capital:

Liabilities......................$ 60,000

Capital- Newton.............38,333

- Barbara........................38,334

- Liz..................................38,333

Totals..........................$ 175,000

What is the amount and character of Newton's recognized gain or loss?