Five years ago, Brian purchased servers to store data used in his business for $15,000. He had taken depreciation deductions of $6,000 over this period, and sold the servers for $10,000 after replacing them with the newest models. How is the sale of the servers be treated for tax purposes? 

$1,000 long-term capital gain from the sale is reported  

$1,000 ordinary loss from the sale is reported 

$1,000 ordinary income from the sale is reported  

No gain or loss from the sale needs to be reported