A piece of equipment has depreciated to $3,000, but it sells for $8,000 at an auction. Which of the following consequences ismostaccurate?

The firm must pay taxes on the selling price less the remaining depreciation costs, $5,000.

The firm must pay taxes on the selling price of $8,000.

The firm can write-off the equipment as a charitable donation since the selling price is less than one-tenth of the original cost of the equipment.

The firm can document the sale as a capital loss.