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In the current year, Sparrow sold machinery with a fair market value of $200,000. The machinery's original basis was $190,000 and Sparrow's accumulated depreciation on

In the current year, Sparrow sold machinery with a fair market value of $200,000. The machinery's original basis was $190,000 and Sparrow's accumulated depreciation on the machinery was $30,000. Sparrow received $50,000 in the current year and a note paying Sparrow $75,000 a year for two years beginning in next year. What is the amount and character of the gain that Sparrow will recognize in each year that he receives payments?

Realized Gain/Loss

Recognized Gain/Loss year 1

Character of Gain/Loss year 1

Recognized Gain/Loss year 2

Character of Gain/Loss year 2

Realized Gain/Loss year 3

Character of Gain/Loss year 3

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