James purchased an asset for $1,000 in 2021 and its value was $1,500 at the end of 2021. In 2022, James sold the asset for $1,400. The sole proprietorship had an economic loss of $100 but realized a gain of $400 in 2022. Which is correct? A) James has a taxable gain in 2021 of $500 and tax deductible loss of $100 in 2022. B) James has taxable gain of $400 in 2022 and an economic loss of $100 in 2022. C) James can defer realized gain of $400 on the conversion of assets rules. D) There is no economic income because he held the asset more than one year, but James has a taxable gain of $400 in 2022.