A machine used in business is stolen. The original cost of the machine 4 years ago was $56,000. Its adjusted basis was zero at the time of the theft, and $44,000 was recovered from the business' insurance policy. There are no other casualties or thefts and no other business depreciable asset dispositions during the year. Which of the statements below is correct?

Before it was stolen, the machine was an ordinary asset.

Before it was stolen, the machine was a 1231 asset.

Before it was stolen, the machine was a capital asset.

The gain from disposition of the machine is a 1231 gain.

None of the above