Anthony was the sole proprietor of an unincorporated retail business for many years. However, after receiving an offer he couldn't refuse, he sold all of his business assets in a single transaction on June $16,2023.$ The total sales price of $$350,000$ included $$38,000$ of inventory.

How should the sale of the inventory be reported on Anthony's $2023$ tax return?

$$ Ordinary income on Schedule C$.$

$$ Capital gain income on Schedule D$.$

$$ Ordinary gain in Part II of Form $4797.$

$$ Gain from disposition of property in Part III of Form $4797.$