Nick purchased a building in 2006 that he uses in his business. Nick uses the straight-line method for the building. Nick's original cost for the building is $420,000 and cost-recovery deductions are $120,000. Nick is in the top tax bracket (ordinary 37% and capital 20%) and has never sold any other business assets. If the building is sold for $560,000, the tax results are A) $260,000 Sec. 1231 gain, all taxable at 20%.

B) $260,000 unrecaptured Sec. 1250 gain, all taxable at 25%.

C) $260,000 Sec. 1231 gain, of which $120,000 is Unrecaptured 1250 gain taxable at 25% and the $140,000 balance is taxable at 20%.

D) $120,000 Sec. 1245 ordinary income at 37%, $140,000 Sec. 1231 gain taxable at 20%