Umair sold some equipment he used in his business on August 29, 2020, that was originally purchased for $64,000 on November 21, 2018. The equipment was depreciated using the 7-year MACRS method for a total of $16,982. Assume there is no additional netting of gains and losses for this taxpayer.

Required:

1. Assume Umair sold the equipment for $46,000: (1) What is the amount of realized gain or loss on the sale of the equipment? (2) Is the nature of the gain or loss considered ordinary or long-term?
2. Assume Umair sold the equipment for $51,000: (1) What is the amount of realized gain or loss on the sale of the equipment? (2) Is the nature of the gain or loss considered ordinary or long-term?