During the current year, Mr. X sold a building he bought in 1986 to XY Corporation for use in its business. Mr. X had used the building in his business. Straight-line depreciation had been claimed on the asset. As a result, Mr. X had a recognized gain of $35,000. Mr. X owns 85% of XY's only class of stock. For income tax purposes, what are the amount and the character of the gain? A $35,000 short-term capital gain. B $35,000 ordinary income. C No income is recognized. D $21,000 ordinary income.