Several Years Ago, Nipher Paid $70,000 to Purchase Equipment to Use

Multiple Choice

Several years ago, Nipher paid $70,000 to purchase equipment to use in its business. This year, it sold the equipment for $76,500. Accumulated MACRS depreciation through date of sale was $18,000. Determine the amount and character of Nipher's gain recognized.

A) $24,500 ordinary gain
B) $24,500 Section 1231 gain
C) $18,000 ordinary gain and $6,500 capital gain
D) $18,000 ordinary gain and $6,500 Section 1231 gain