A piece of depreciable machinery is sold. It has been held for three years and qualifies as Section 1231 property. The selling price is greater than the adjusted basis but less than the original purchase price. Which statement below is correct?

All of the gain will be subject to Section 1245 recapture.

Only a portion of the gain will be subject to Section 1245 recapture.

None of the gain will be subject to Section 1245 recapture.

Section 1245 recapture will not apply because there is a loss on the sale.