Sara acquired business machinery (which qualified as 5-year MACRS property) on July 15, 2018, for $25,000. In 2018, Sara claimed a $5,000 regular MACRS depreciation deduction and she elected not to claim Sec. 179 depreciation or bonus depreciation. Because of her low tax rate in 2019-2021, Sara did not claim any depreciation deduction on her tax returns in those years. She sells the machine on July 1, 2021, for $12,000. 5 (Click the icon to view the MACRS half-year convention rates.) Read the requirements .... Requirement a. What is the adjusted basis of the machine on the sale date? Select the formula and enter the amounts to compute the adjusted basis of the machine on the sale date. (Use MACRS rates to three decimal places, X.XXX%. Round interim annual depreciation calculations and your final answers to the nearest dollar.) Acquisition cost Allowable depreciation Adjusted basis at time of sale 25000 X Requirements a. What is the adjusted basis of the machine on the sale date? b. How much gain or loss is recognized on the sale of the machine? Print Done Reference General Depreciation System-MACRS Personal Property Placed in Service After 12/31/86 Applicable Convention: Half-Year Applicable Depreciation Method: 200 or 150 Percent Declining Balance Switching to Straight Line Recovery period and Depreciation Rates Recovery Year 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year Year 1 33.33 20.00 14.29 10.00 5.00 3.750 Year 2 44.45 32.00 24.49 18.00 9.50 7.219 Year 3 14.81 19.20 17.49 14.40 8.55 6.677 Year 4 7.41 11.52 12.49 11.52 7.70 6.177 Year 5 11.52 8.93 9.22 6.93 5.713 Year 6 5.76 8.92 7.37 6.23 5.285 Year 7 8.93 6.55 5.90 4.888 Year 8 4.46 6.55 5.90 4.522 Year 9 6.56 5.91 4.462 Year 10 6.55 5.90 4.461 Year 11 3.28 5.91 4.462 Year 12 5.90 4.461 Year 13 5.91 4.462 Year 14 5.90 4.461 Year 15 5.91 4.462 Year 16 2.95 4.461 Year 17 4.462 Year 18 4.461 Year 19 4.462 Year 20 4.461 Year 21 2.231