Find what is the amount and character of sumner

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Problem 1: Sumner sold equipment that it uses in its business for $31,400. Sumner bought the equipment a few years ago for $79,300 and has claimed $39,650 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss?

Option 1: $8,250 §1231 loss.
Option 2: $8,250 §1245 loss.
Option 3: $47,900 ordinary loss.
Option 4: $8,250 capital loss.
Option 5: None of the choices are correct.

Reference no: EM132990431

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