LO.1, 3 On January 6, 2012, Donna transferred machinery worth $100,000 (basis of

$30,000) to a controlled corporation, Jay, in a transfer that qualified under § 351.

Donna had deducted depreciation on the machinery in the amount of $80,000 when she held the machinery for use in her proprietorship. On November 16, 2012, Jay Corporation sells the machinery for $95,000. What are the tax consequences to Donna and to Jay Corporation on the sale of the machinery?