What is the amount and character of sarah gain or loss

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Question 1: Sarah sold a business-use machine for $50,500. Sarah bought the machine for $54,500 several years ago and has claimed $12,250 of depreciation expense on the machine. What is the amount and character of Sarah's gain or loss?

Multiple Choice

Option 1: $8,250 capital gain.

Option 2: $8,250 ordinary gain.

Option 3: None of the choices are correct.

Option 4: $4,000 §1231 loss.

Option 5: $8,250 §1231 loss.

Reference no: EM132580212

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