Nell acquired a 50% interest in a partnership on January 2, year, 1, by contributing $2,500 cash & a machine with an adjusted basis of $5,500 and a FMV of $7,500. During year 1, Nell received guaranteed payment of $15,000. His distributive share of partnership ordinary income was $9,000, his share of long-term capital gains was $3,000, and his share of charitable contributions was $1,000. During the year the partnership borrowed $6,000 using the machine as collateral.

What is Nell's basis in his partnership interest as of December 31st, Year 1?

A. $19,000

B. $22,000

C. $7,000

D. $4,000

E. None of the above