In $2024,$ Howard had a Section $1231$ gain of $$12,000.$ In the prior years, Howard had the following Section $1231$ transactions:$$

Year

Net Section $1231$ Transaction

$2023$

$$5,000$ Loss

$2022$

$$3,000$ Loss

$2021$

None

$2020$

None

$2019$

None

$2018$

$$7,000$ Gain

$2017$

$$4,000$ Gain

How will Howard's Section $1231$ gain be taxed in the current year?

$$12,000$ will be taxed as ordinary income.

$$8,000$ will be taxed as ordinary income and $$4,000$ will be taxed as a Section $1231$ capital gain.

$$12,000$ will be taxed as a Section $1231$ capital gain.

None of the above.