Alpha sold machinery, which it used in its business, to Beta, a related entity, for $39,550. Beta used the machinery in its business. Alpha bought the machinery a few years ago for $50,450 and has claimed $29,550 of depreciation expense. What is the amount and character of Alpha's gain?

Multiple Choice

• $8,650 ordinary gain.

• $18,650 ordinary income under 1239.

• $18,650 capital gain.

• None of the choices are correct.

• $10,000 ordinary gain and $8,650 1231 gain.