During 2020, Paul sells residential rental property for $240,000, which he acquired in 1999 for $160,000. Paul has claimed straight-line depreciation on the building of $60,000. What is the amount and nature of Paul’s gain on the sale of the rental property?
a. $140,000 ordinary income
b. $80,000 “unrecaptured depreciation” and $60,000 ordinary gain
c. $140,000 Section 1231 gain
d. $80,000 Section 1231 gain, $60,000 “unrecaptured depreciation”
e. None of the above