Question:

In year 1, DEF recognized a loss of $15,000 on land that it had held for investment. It also recognized a $20,000 gain on equipment it had purchased a few years ago. The equipment sold for $50,000 and had an adjusted basis of $30,000. DEF had deducted $15,000 of tax depreciation on the equipment.

Answer:

	Book Tax Difference	Favorable / Unfavorable	Permanent / Temporary
Year 1	$10,000	Unfavorable	Temporary
Year 2	$0	Not Applicable	Not Applicable

This is the answer but I don't know how they got this. Please explain and show all work.