Bobby’s marginal tax rate has been low for several years because his sole proprietorship has had low profits. Therefore, he has not elected Sec. 179 expensing, elected out of bonus depreciation, and elected to use the alternative depreciation system for property acquisitions. Bobby acquires, holds, or sells the following assets in 2023:

Assume the half-year convention applies for each year.

a. What is the depreciation deduction for each asset in 2023?

b. What amount of gain or loss does Bobby recognize on the properties sold in 2023?

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Recovery Date Original Acquired Date Sold Cost Basis Selling Price Depreciation Period Method (Years) Equipment Light duty truck (Business-use) Furniture Automobile 5/1/19 12/1/23 6/1/23 $40,000 SL ADS 7 30,000 $8,000 SL ADS 5 3/1/19 - 10,000 - SL ADS 7/1/20 12/1/23 12,000 10,000 SL ADS 5 75