### How gain be treated

Assignment Help Accounting Basics
##### Reference no: EM13153074

During the year, Henry, a sole proprietor, sold for \$65,000 a machine that was used in his business. The machine had been purchased in 2003 for \$50,000, and when it was sold it had an adjusted basis of \$30,000. How should this gain be treated?

a) Ordinary income of \$35,000

b) Section 1231 gain of \$35,000

c) Section 1231 gain of \$20,000 and ordinary income of \$15,000

d) Section 1231 gain of \$15,000 and ordinary income of \$20,000

e) None of the above

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