The WXYZ Partnership has the following two assets before its liquidating distribution to partner W:
Accounts receivable: Basis $0 Value $20,000
Capital assets: Basis $12,000 Value $20,000
If partner W with a $3,000 basis in her 25% interest receives $10,000 of capital assets, how much income must she recognize as a result of the liquidation?
$2,000 capital gain
$5,000 ordinary income
$10,000 ordinary income