Don owns equipment that he purchased several years ago for $400,000. Over the years he properly deducted $110,000 of depreciation. The depreciation will have to be recaptured as ordinary income on the sale. There is a $90,000 mortgage on the property. Don has an offer for the equipment from an individual who says he will pay $100,000 down and $100,000 per year for five years. There is no mention of interest. As the mortgage is nonassumable, Don will pay off the mortgage using most of the down payment. Don is age 61, and proceeds from the sale along with a pension from his employer will provide for his retirement. Don plans to retire next year. He currently has a 25% marginal tax rate. Discuss the tax implications of the sale. Is there anything Don can do to improve his situation?