Orange Company Had Machinery Destroyed by a Fire on December

Multiple Choice

Orange Company had machinery destroyed by a fire on December 23, 2014. The machinery had been acquired on April 1, 2012, for $49,000 and its adjusted basis was $14,200. The machinery was completely destroyed and Orange received $30,000 of insurance proceeds for the machine and did not replace it. This was Orange's only casualty or theft event for the year. As a result of this event, Orange has:

A) $4,200 ordinary loss.
B) $15,800 § 1245 recapture gain.
C) $14,200 § 1245 recapture gain.
D) $30,000 § 1231 gain.
E) None of the above.