Lanham, Inc. incurs the following losses on disposition of business assets during the year: 

Loss on the abandonment of office equipment $25,000

Loss on the sale of a building (straight-line depreciation taken in prior years of $200,000) 250,000 Loss on the sale of delivery trucks 15,000

What is the amount and character of the losses to be reported on Lanham’s tax return?

a.  $40,000 Section 1231 loss only.

b.  $40,000 Section 1231 loss, $50,000 long-term capital loss.

c.  $290,000 Section 1231 loss.

d.  $40,000 Section 1231 loss, $250,000 long-term capital loss.