The HMS Partnership, a Cash Method of Accounting Entity, Has

The HMS Partnership, a cash method of accounting entity, has the following balance sheet at December 31 of last year: $$\begin{array} { | l | r | c | } \hline { \text { Assets } } & \text { Basis } & \text { Fair Market Value } \\\hline \text { Cash } & \$ 51,000 & \$ 51,000 \\\text { Accounts receivable } & { 0 }& { 210,000 } \\ \text { Total } & \underline { \$ 51,000 } & \$ 261,000 \\\hline\end{array}$$
$\begin{array}{|l|l|l|}\hline\text { Equities } & \text { Basis } & \text { Fair Market Value } \\\hline \text { Notes payable } & \$ 30,000 & \$ 30,000 \\\text { Henry, capital } & 7,000 & 77,000 \\\text { Mark, capital } & 7,000 & 77,000 \\\text { Sam, capital } & \underline{\mathbf{7 , 0 0 0}} & \underline{\mathbf{7 7 , 0 0 0}} \\\text { Total } &\$ 51,000 & \underline{\$ 261,000}\\\hline\end{array}$ Sam, who has a one- third interest in profits, losses, and liabilities, sells his partnership interest to Beverly, for
$77,000 cash on January 1 of this year. Sam's basis in his partnership interest (which, of course, includes a share of partnership liabilities) at the time of the sale was $17,000. In addition, Beverly assumes Sam's share of the partnership liabilities. What is the amount and character of the gain that Sam will recognize from this sale?