Hauswirth Corporation sold (or exchanged) some manufacturing equipment in year 0. Hauswirth bought the machinery several years ago for $65,000 and it has claimed $23,000 of depreciation expense against the equipment.
a. Assuming that Hauswirth receives $50,000 in cash for the equipment, compute the amount and character of Hauswirth's recognized gain or loss on the sale.
b. Assuming that Hauswirth receives like-kind equipment with a fair market value of $50,000 in exchange for its equipment, compute Hauswirth's gain realized, gain recognized deferred gain, and basis in the new equipment.
c. Assuming that Hauswirth receives $20,000 in cash in year 0 and a $50,000 note receivable that is payable in year 1, compute the amount and character of Hauswirth's gain in year 0 and in year 1.