Norm Acquired Office Equipment for His Business in 2011 at a Cost

Multiple Choice

Norm acquired office equipment for his business in 2011 at a cost of $10,000.After two years of use,Norm exchanges the equipment for different equipment with a fair market value of $7,000.MACRS depreciation on the original equipment was $4,753 The exchange qualifies as a like-kind exchange.Immediately after the exchange Norm sells the new equipment for $7,000 cash.What is the amount and character of the gain recognized?

A) No gain or loss.
B) $1,753 Section 1231 gain.
C) $1,753 Section 1245 ordinary income.
D) $4,753 Section 1231 gain.
E) $4,753 section 1245 ordinary income, and $3,000 Section 1231 loss.