Brandon, an individual, began business four years ago and has sold 1231 assets with $5,000 of losses within the last 5 years. Brandon owned each of the assets for several years. In the current year, Brandon sold the following business assets: Asset Original Cost Accumulated Depreciation Gain/Loss Machinery $ 30,000 $ 7,000 $ 10,000 Land 40,000 0 20,000 Building 90,000 20,000 (5,000 ) Assuming Brandon's marginal ordinary income tax rate is 35 percent, what effect do the gains and losses have on Brandon's tax liability?

A.$25,000 ordinary income, $8,750 tax liability.

B.$25,000 1231 gain and $3,750 tax liability.

C.$13,000 1231 gain, $12,000 ordinary income, and $6,150 tax liability.

D.$12,000 1231 gain, $13,000 ordinary income, and $6,350 tax liability.

E.None of the choices are correct.