Samuel pays $50,000 for a machine. Samuel also paid an additional $6,000 related to the installation, taxes, and transportation for this asset. After making the purchase, Sam replaces the motor at a cost of $4,000.

a) Determine Samuels adjusted basis in the machine, assuming he has taken $20,000 of depreciation to date.

b) What is Samuels realized gain or loss, if he sells the machine for $45,000?