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In the current year, Henry, a sole proprietor, sold for $65,000 a machine that was used in his business. The machine had been purchased in

In the current year, Henry, a sole proprietor, sold for $65,000 a machine that was used in his business. The machine had been purchased in a few years ago for $50,000, and when it was sold, it had accumulated depreciation of $20,000 and an adjusted basis of $30,000. For the current year, how should this gain be treated? 

A. Ordinary income of $35,000 

B. Section 1231 gain of $20,000 and ordinary income of $15,000 

C. Section 1231 gain of $15,000 and ordinary income of $20,000 

D. Section 1231 gain of $35,000 

E. None of these choices are correct.


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