Ken sold a rental property for $$725,000.$ He received $$153,000$ in the current year and $$143,000$ each year for the next four years. Of the sales price, $$542,500$ was allocated to the building, and the remaining $$182,500$ was allocated to the land. Ken purchased the property several years ago for $$560,000.$ When he initially purchased the property, he allocated $$445,000$ of the purchase price to the building and $$115,000$ to the land. Ken has claimed $$16,250$ of depreciation deductions over the years against the building.

Ken had no other sales of $$1231$ or capital assets in the current year.

Required:

a$.$ For the year of the sale, determine Ken's recognized gain or loss.

b$.$ For the year of the sale, determine character of Ken's gain, and calculate Ken's tax due because of the sale $($assuming his marginal ordinary tax rate is $32$ percent$).$

Complete this question by entering your answers in the tabs below.

Required A

Required B

For the year of the sale, determine Ken's recognized gain or loss.

Note: Round your final answers to the nearest whole dollar amount. Input all the values as positive numbers.

$\backslash$table$[[$Description$,$Amount,$],[(1)$ Amount Realized,,$],[(2)$ Adjusted Basis,,$],[,,],[(4)$ Gross Profit Percentage,,$\%$