Palladium's interest in the equal PSU Partnership is liquidated when the PSU Partership makes a Liquidating Distribution to Palladium and the remaining Partners assume Palladium's share of the Partnership Liabilities. Palladium receives $4,000 in Cash, Accounts Receivable of $24,000 (Fair Market Value) and Equipment worth (Fair Market Value) of $52,000. On the date of the Liquidation, the Partnership's Cash Basis Balance Sheet reflected the following Cash (Adjusted Basis - $36,000; Fair Market Value - $36,000): Unrealized Receivable (Adjusted Basis-S-0: Fair Market Value - 572,000 Equipment (Adjusted Basis- $96,000; Fair Market Value - $156,000) (Total Assets: Adjusted Basis - $132,000 Fair Market Value - $264,000); Notes Payable (Adjusted Basis - 524,000; Fair Market Value - $24,000); Capital Accounts: Palladium Capital (Adjusted Basis - $36,000; Fair Market Value - 580,000: Scala Capital Adjusted Basis - 536,000: Fair Market Value - 580,0003 Unervau Capital (Adjusted Basis - 536,000; Fair Market Value - $80,000) (Total Liabilities And Equity Capital Adjusted Basis - 3132,000, Fair Market Value - $264,000). As a result of this Liquidation, Palladium has: No Recognized Gain or Loss O $44,000 Ordinary Income and -0- Capital Gain $24,000 Ordinary Income and $20,000 Capital Gain, $20,000 Ordinary Income and $24,000 Capital Gain