Bobby's marginal tax rate has been low for several years because his sole proprietorship has had low profits. Therefore, he has not elected Sec. 179 expensing, elected out of bonus depreciation, and elected to use the alternative depreciation system for property acquisitions. Bobby acquires, holds, or sells the following assets in 2018:

Assume the half-year convention applies for each year.

a. What is the depreciation deduction for each asset in 2018?

b. What amount of gain or loss does Bobby recognize on the properties sold in 2018?

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Recovery Period (Years) Selling Depreciation Price Original Date Acquired Date Sold Cost Basis Method SL ADS Equipment Light duty truck (Nonpersonal-use) Furniture 6/1/18 5/1/14 $40,000 30,000 $ 8,000 12/1/18 SL ADS 5 3/1/14 10,000 12,000 SL ADS Automobile 12/1/18 SL ADS 7/1/15 10,000