Lozano sold a machine to a machine dealer for $52,000. Lozano bought the machine for $53,000 several years ago and has claimed $11,500 of depreciation expense on the machine. What is the amount and character of Lozano's gain or loss?

$10,500, 1231 loss

$1,000, 1231 loss

$10,500, ordinary gain

$10,500, capital gain

None of the choices are correct.