Martone Corporation Sells Two Machines and a Warehouse It Has

Multiple Choice

Martone Corporation sells two machines and a warehouse it has been using for storage in the current tax year.Each of the machines cost $25,000 and has an adjusted basis of $11,000 when each was sold for $14,000.The warehouse cost $105,000, has an adjusted basis of $60,000 and is sold for $95,000.All assets were depreciated using MACRS depreciation.What is the amount and type of gain recognized by Martone on the sale of these assets?

A) $6,000 Section 1245 recapture; $35,000 Section 1231 gain
B) $6,000 Section 1245 recapture; $7,000 Section 291 recapture; $28,000 Section 1231 gain
C) $6,000 section 1245 recapture; $35,000 Section 291 recapture
D) $41,000 capital gain