The December 31, 2014, Balance Sheet of GST Services, LLP

The December 31, 2014, balance sheet of GST Services, LLP reads as follows: The partners share equally in partnership capital, income, gain, loss, deduction, and credit. Capital is not a material income-producing factor to the partnership, and all partners are active in the business. On December 31, 2014, general partner Sue receives a distribution of $200,000 cash in liquidation of her partnership interest under § 736. Sue's outside basis for the partnership interest immediately before the distribution is $150,000. (Her basis does not correspond to her capital account because she purchased the interest a few years ago at a $10,000 premium.) How much is Sue's gain or loss on the distribution and what is its character?

A) $50,000 ordinary income.
B) $40,000 ordinary income; $10,000 capital gain.
C) $40,000 capital gain; $10,000 ordinary income.
D) $50,000 capital gain.
E) None of the above.