During the current year, Phyllis Diaz sold her $20\%$ interest in Carson Partnership for $$46,000.$

She held the interest for several years.

Prior to the sale, the partnership had the following on their books:

Adj. Basis Fair Market Value

Cash $ $70,000$ $ $70,000$

Accounts Receivable $0$ $ $30,000$

Machinery$*$ $ $30,000$ $ $50,000$

Real Estate $ $120,000$ $ $100,000$

$*$The partnership would recognize $$6,000$ of Sec$\mathrm{.}1245$ gain on this asset if it was sold.

Liabilities $ $20,000$ $ $20,000$

Capital$-$Phyllis $ $60,000$ $ $46,000$

Capital$-$Michael $ $140,000$ $ $184,000$

Prepare a Tax Workpaper that shows the calculation of Phyllis' gain or loss realized. Be sure to answer the question, $$What will be the character of the gain or loss?$$