On December 31 of the current year, Rita's adjusted basis in Diamond Partnership was $40,000, which included her $30,000 share of partnership liabilities. The partnership had no unrealized receivables or inventory. Rita sold her interest for $20,000 cash and was relieved of any partnership liabilities. What is the amount and character of Rita's gain or loss?

A. $10,000 capital gain.

B. $10,000 ordinary income.

C. $0

D. $(20,000) capital loss.