T had a long-term capital gain of $40,000 from transactions during the year. He also had a $5,000 gain on the sale of equipment used in the business in which he is a material participant. In the previous year, he had ordinary income of $250,000 and a $10,000 net capital loss, and he reduced ordinary income by $3,000. what is T's Category 3 NII for the current year?

A) $33,000

B) $35,000

C) $37,000

D) $42,000