Problem 5-39 (LO 5-2) [The following information applies to the questions displayed below.] What book-tax differences in year 1 and year 2 associated with its capital gains and losses would DEF Inc. report in the following alternative scenarios? Identify each book-tax difference as favorable or unfavorable and as permanent or temporary Problem 5-39 Part a a. In year 1, DEF recognized a loss of $15,000 on land that it had held for investment. In year 1, it also recognized a $30,000 gain on equipment it had purchased a few years ago. The equipment sold for $50,000 and had an adjusted basis of $20,000. DEF had deducted $40,000 of depreciation on the equipment. In year 2, DEF recognized a capital loss of $2,000. Book-tax Difference Favorable or Unfavorable Temporary or Permanent Year 1 Year 2 Problem 5-39 Part be b. In year 1, DEF recognized a loss of $15,000 on land that it had held for investment. It also recognized a $20,000 gain on equipment it had purchased a few years ago. The equipment sold for $50,000 and had an adjusted basis of $30,000. DEF had deducted $15,000 of tax depreciation on the equipment. There were no capital transactions in year 2. (For all requirements, leave no answer blank. Enter zero if applicable and select "Not applicable" if no effect.) Book-tax Difference Favorable or Unfavorable Temporary or Permanent Year 1 Year 2