How are you taxed if liquidated?

Not an urgent question, just one that came to mind while viewing the DeFi Financial Stack/Money Market vids. If you take out a loan on one of the platforms, then you’re liquidated, how would you go about keeping track of that transaction for tax time? Is it a total loss of funds or would the amount you borrowed be counted as a gain since you don’t have to pay back the loan due to liquidation?

Thanks in advance

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