Kerry Orange owned a 20% interest for 20 years in the T & T Partnership, which owns no unrealized receivables or inventory items. In the current year, he sold his interest for $30,000 and was relieved of his share of partnership liabilities of $2,200. At the date of sale, Oranges total basis in his partnership interest was $24,000. What gain or loss should Orange report?

$6,000 capital gain.

$3,800 ordinary income.

$8,200 capital gain.

$8,200 ordinary income.