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Problem 3 of 14. Show process.

A. CALCULATE the amount, if any, of recapture of depreciation, ordinary loss or capital gain on the disposal of an asset that was sold at the end of year 1 for $ 18,000. The machine was originally purchased at a cost of $ 20,000 and was depreciated using the MACRS method for a 5 year property class.

B. INDICATE if there was recapture of depreciation (D), ordinary loss (P) or capital gain (G) in the disposal of this asset. [fill these blanks]

* Amount = $_______________ * Type of disposition: _____________