Compact Corporation purchased $90,000 of five-year equipment on March 10, 2019 and elected to expense only $20,000 of the cost under Section 179. Compact sells the equipment on July 30, 2020, for $95,000. Compact properly deducted $25,200 under MACRS depreciation for 2019 & 2020. What is the proper classification of the gain?

Group of answer choices

Section 1245 ordinary income is $45,200; Section 1231 gain is $5,000.

Section 1245 ordinary income is $50,200; Section 1231 gain is $0.

Section 1245 ordinary income is $5,000; Section 1231 gain is $45,200.

Section 1245 ordinary income is $0; Section 1231 gain is $50,200.