Melody Works in Her Home Using a Computer She Purchased

Multiple Choice

Melody works in her home using a computer she purchased two years ago for $2,500.The total adjusted basis for the computer is now $1,000.Her husband and children used the computer 20 percent of the time to play computer games and for personal correspondence.She sells the computer for $1,200.How much and what kind of gain does Melody recognize?

A) $200 capital gain
B) $200 Section 1245 recapture
C) $200 Section 1231gain
D) $460 Section 1245 recapture