Frank mini mart sold a piece of equipment on an installnebt agreement to a competitor on the other side of town. The other owner failed to make the payment and Frank had to repossess the equipment. What is Frank's gain or loss on repossessed personal property with a fair market value of $12,000 on the date of repossession where the seller's basis in the installment obligation at the time of repossession is $7,500 and the cost of repossession were $500

Loss of $500

Gain of $4,000

Gain of $4,500

Gain of $5,000