1. In August 2019 Suzanne purchased office equipment used in her trade or business. The equipment is treated as 5-year property for tax purposes. She paid $40,000 cash, signed a promissory note for $12,000 and assumed a liability on the asset of $3,000. On June 10, 2020 she sold the equipment for $40,000. Assume Accumulated MACRS depreciation on the date of sale was $19,800. Compute the gain or loss on the sale of the equipment. Compute the Section 1245 recapture amount and the Section 1231 Gain for tax purposes. Show supporting computations.

2. Suzanne purchased a computer in June, 2018 for $15,000. This was her only asset purchase for the year. Suzanne did not elect expense under section 179. In May, 2020 Suzanne sold the computer. Compute the allowable depreciation expense for the current tax year.