50. LO.4, 7 Jeremiah is the tenant of a shopping center. In 2011, he installed $450,000 of capitalized leasehold improvements in his store at the mall. He took $450,000 of depreciation on the leasehold improvements before selling them for $420,000 to the lessee who took over his lease in 2013. Straight-line depreciation on the leasehold improvements up to the point of sale would have been $67,253. Jeremiah’s depreciation was so much larger than straight-line depreciation because he took 100% § 168(k) depreciation in 2011. What is Jeremiah’s recognized gain? What is the nature of that gain? How is the transaction reported in 2013?