Karey bought a small shopping mall on July 15, Year 1, for a total price of $2,340,000. Karey used straight-line depreciation and deduction $565,000 before the mall was sold for $2.5 million on December 31, Year 10. The gain on the sale should be reported as

A. $565,000 ordinary income and $160,000 Sec. 1231 gain.

B. $160,000 capital gain.

C. $725,000 Sec. 1231 gain.

D. $725,000 ordinary income