Trojan Inc. was incorporated in 2012. In 2012, it had no Section 1231 transactions. In 2013, Trojan had a net Section 1231 loss of $35,000. In 2014, Trojan had a Net Section 1231 gain of $10,000. In 2015 Trojan has a $50,000 net Section 1231 gain. Trojan should treat the 2015 gain as

a.

An ordinary gain of $40,000.

b.

A long-term capital gain of $50,000.

c.

An ordinary gain of $35,000 and a long-term capital gain of $15,000.

d.

An ordinary gain of $25,000 and a long-term capital gain of $25,000.

e.

An ordinary gain of $15,000 and a long-term capital gain of $35,000.

According to the test bank 2019, the answer is (d)

Please explain how to calculate this number! Thank you!