On February 1, 2020, Lex purchased equipment that was used in her surfing business for $70,000. Lex deducted $20,000 of depreciation. On December 31, 2022. Lex proceeded to sell this equipment for $100,000.

What is the appropriate amount of gain that should be reported under section 1231 and section 1245?

A) Section 1231: $20,000; Section 1245: $30,000 gain

B) Section 1231: $30,000; Section 1245: $20,000 gain

C) Section 1231: $50,000; Section 1245: $0 gain

D) Section 1231: $0; Section 1245: $50,000 gain