Several years ago Nicolas, a timber dealer, purchased a tract of land with a substantial stand of trees on it$.$ The land cost $$22,815,$ and the

timber cost $$397,200.$ On the first day of $2022,$ the timber was appraised at $$516,360.$ In August $2022,$ Nicolas cut the timber and sold it

for $$567,996.$ Nicolas elects to treat the cutting as a sale or exchange under $1231.$

As a result, Nicolas has a $

$1231$ gain and $

of ordinary income.