In year 3, Daniels, an individual, sold depreciable equipment for $21,000 that had an adjusted basis of

Question:

In year 3, Daniels, an individual, sold depreciable equipment for $21,000 that had an adjusted basis of $12,000, resulting in a $9,000 gain. The property had cost Daniels $20,000 when purchased in year 1, and $8,000 of MACRS depreciation had been taken. How should Daniels report the gain on Daniels' year 3 tax return?
a. As a long-term capital gain of $9,000
b. As an ordinary gain of $1,800 and a § 1231 gain of $7,200
c. As an ordinary gain of $8,000 and a § 1231 gain of $1,000
d. As an ordinary gain of $7,200 and a § 1231 gain of $1,800