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On March 17, a calendar-year taxpayer sells a machine used in its business for $9,000....

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Accounting

On March 17, a calendar-year taxpayer sells a machine used in its business for $9,000. The machine was purchased sixteen months earlier for $8,500 and depreciation deductions of $1,800 have been taken. What is the amount and type of gain

recognized on the sale?

a. $2,300 Section 1231 gain

b. $2,300 ordinary income

c. $1,800 Section 1245 recapture; $500 Section 1231 gain

d. $1,800 Section 1250 recapture; $500 Section 1231 gain

e. None of the above

Please give an explanation as to how you got the answer!

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