This year, Nelson sold equipment used solely in his business for $54,200. Nelson had acquired the equipment at a cost of $50k and had properly deducted $30,800 of depreciation under the MACRS rules (tax term). If Nelson had used straight-line depreciation instead, $20k would have been properly deducted. What amount of gain should be reported under section 1231 and 1245 (irs - internal revenue service - tax law codes)

THIS IS TAX ACCOUNTING

Options (amounts in $)

A sec 1231 gain = 24,200; sec 1245 ordinary gain = 10,800

B sec 1231 gain = 4,200; sec 1245 ordinary gain = 30,800

C sec 1231 gain = 30,800; sec 1245 ordinary gain = 4,200

D sec 1231 gain = 35,000; sec 1245 ordinary gain = 0