City Taxi Service purchased a new auto to use as a taxi on January 1, Year 1, for $26,000. In addition, City paid sales tax and title fees of $1,080 for the vehicle. The taxi is expected to have a five-year life and a salvage value of $5,480. Required: Using the straight-line method, compute the depreciation expense for Year 1 and Year 2. Note: Round your answers to the nearest whole dollar amount. Assume the auto was sold on January 1, Year 3, for $21,206. Determine the amount of gain or loss that would be recognized on the asset disposal. Note: Round the intermediate calculations to nearest whole dollar amount.