Bill Sharpe, owner of Sharper Knives Inc., is closing his business at the end of the current fiscal year. His sole asset, the knife-sharpening machine, is four years old. The machine has accumulated depreciation of $171,900. Bill has agreed to sell the machine at the end of the year for $100,000. What is the impact on taxes from the sale of the machine? The tax rate is 35%.

a. $25,165 tax refund from IRS

b. $7,665 tax refund from IRS

c. $25,165 additional taxes owing to IRS

d. $7,665 additional taxes owing to IRS

e. $27,335 additional taxes owing to IRS