TP owns and operates a resort hotel in a small town. As a courtesy to his customers, TP owns a passenger van which he uses to pick-up and deliver customers to and from the local airport. TP purchased the passenger van for $50,000 several years ago.

This year, TP sold the passenger van for $20,000 so he could purchase a brand new larger van. At the time of the sale, TP had claimed $42,500 as depreciation deductions attributable to the passenger van.

Assuming TP has no other gains or losses, the passenger van is a

1. capital asset

2. non-capital asset

3. Section 1221 asset

4. Section 1231 asset

Select One:

A. (1) and (2) only are correct

B. (1) and (3) only are correct

C. (1) and (4) only are correct

D. (2) and (4) only are correct