The Kleins owned a beach rental property (Section 1231 property) for which they overpaid, and after a recent hurricane and damage to the area they have sold the property at a loss. What are the income tax ramifications of this loss?

A)

It is deductible as an ordinary loss without limit

B)

It is deductible as an ordinary loss to the extent they have net investment income

C)

It is deductible as a capital loss without limit

D)

It is deductible as a capital loss with a $3,000 limitation on net capital losses