Walker Corporation acquires a business automobile with a fair market value of $20,000 by trading in an old automobile and giving $14,000. Walker paid $12,000 for the old automobile, which has an adjusted basis of $1,000 at the date of the trade. Two years after acquiring the new automobile, Walker sells it for $15,000. Depreciation taken on the automobile is $7,000. How much gain or loss should Walker recognize on the sale, and how should it be characterized?