Question
In 2022, Alejandra Cruz sold for $15,000 a pulverizing machine used in her business. The property was purchased on May 1, 2020, at a cost
In 2022, Alejandra Cruz sold for $15,000 a pulverizing machine used in her business. The property was purchased on May 1, 2020, at a cost of $12,500. Alejandra has claimed depreciation on the pulverizing machine of $4,750. What is the amount and nature of Alejandra's gain as a result of the sale of the pulverizing machine?
A.$7,250 Section 1231 gain
B.$7,250 ordinary income under Section 1245
C.$2,500 ordinary income and $4,750 Section 1231 gain
D.$2,500 Section 1231 gain and $4,750 ordinary income under Section 1245
E.$4,750 Section 1231 gain and $2,500 ordinary income under Section 1245
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