Manuel is negotiating the sale of two of his rental properties. He has an offer of $500,000 for each condo. Manuel bought one condo in 1986 for $400,000 and has deducted depreciation of $185,000 using ACRS (accelerated depreciation). Straight line depreciation would have been $125,000 if he had elected to use it. Manuel paid $300,000 for the condo he bought in 1993, and he has deducted depreciation of $81,800 using the MACRS rates for residential real estate. Compare the realized gains or losses and the recognized gains or losses of the two properties, assuming Manuel sells both. Explain the differences.