Jake sold some equipment he used in his business on August 29, 2019, that was originally purchased for $66,000 on November 21, 2018. The equipment was depreciated using the 7-year MACRS method for a total of $17,513. Assume there is no additional netting of gains and losses for this taxpayer.

Required:

1. Assume Jake sold the equipment for $47,000: (1) What is the amount of realized gain or loss on the sale of the equipment?

(2) Is the nature of the gain or loss considered ordinary or long-term?

2. Assume Jake sold the equipment for $52,500: (1) What is the amount of realized gain or loss on the sale of the equipment?

(2) Is the nature of the gain or loss considered ordinary or long-term?