In January 2015, Sue purchased and placed into service a $20,000 piece of equipment for exclusive use in her business. Since then, she claimed a $6,000 Section 179 deduction and $6,654 MACRS depreciation. She sold the equipment in November 2017 for $7,000. What is the amount and type of gain or loss, and where on Form 4797 does Sue report the sale?

$346 1231 loss, Part I.

$346 1231 gain, Part I.

$346 1245 loss, Part III.

$346 1245 gain, Part III.