John owns two machines, Machine A was purchased five years ago for $30,000 and has $5,000 of remaining basis. John sells machine A in the current year for $3,000. Machine B was purchased two years ago for $15,000. He plans to sell Machine B next year for $18,000 at which time he estimates $13,000 of remaining basis. What is the tax effect of selling the machines?

1. john will recognize $5,000 long-term capital gain next year.
2. john will recognize $2,000 ordinary loss this year and $3,000 long-term capital gain and $2,000 ordinary income next year
3. john will recognize $2,000 ordinary loss this year and $4,000 ordinary income and $1,000 long-term capital gain next year
4. john will recognize $2,000 ordinary loss this year and $5,000 ordinary income next year