4. Suppose the taxpayer received for the machinery $35,000 in cash, a ring worth $3,000 and the buyer assumed the sellers $14,000 note. The taxpayer properly took $7,000 of depreciation on the note.

1) What is the amount realized 2) What is the adjusted basis of the property just prior to sale 3) What is the gain recognized on the sale of the property

4) If the only thing the taxpayer received was cash of $2,000 and a new machine worth $48,000 and the basis was the same how much gain would be recognized on the sale?