The Gladys Corporation buys office equipment costing $1,074,000 on May 12, 2019. In 2022, new and improved models of the equipment make it obsolete, and Gladys sells the old equipment for $34,000 on December 27, 2022. The MACRS accumulated depreciation would have been $1,046,262 at the date of the sale and the straight-line accumulated depreciation would have been $322,200.

a. By assuming that it takes the maximum cost-recovery deductions allowable on the equipment, Gladys corporation has a $_____? gain realized on the sale of which $_____? is subject to Section 1245 recapture.

b. By assuming that it takes the minimum cost-recovery deductions allowable on the equipment, Gladys corporation has a $_____? loss realized on the sale of which $_____? is subject to Section 1245 recapture.