A corporation owned a shopping mall and decided in 20X1 that it had too much parking space, so it developed and sold the excess space. The excess space had an original cost of $50,000, and in 20X1, had a fair market value of $55,000. In 20X3, the property was sold for $75,000. What would be the tax consequences, and in what years, to the corporation?

• A - In 20X1, $2,500 taxable capital gain. In 20X3, $20,000 business income.

• B - In 20X1, $2,500 taxable capital gain. In 20X3, $10,000 taxable capital gain.

• C - In 20X1, no tax consequences. In 20X3, taxable capital gain $12,500.

• D - In 20X1, no tax consequences. In 20X3, $2,500, taxable capital gain and $20,000 business income.