Blue Company sold machinery for $45,000 on December 23, 2017 . The machinery had been acquired on April 1, 2015, for $69,000 and its adjusted basis was $34,200 . The § 1231 gain, § 1245 recapture gain, and § 1231 loss from this transaction are:

a. $0 § 1231 gain, $10,800 § 1245 recapture gain, $0 § 1231 loss.
b. $0 § 1231 gain, $0 § 1245 recapture gain, $14,800 § 1231 loss.
c. $0 § 1231 gain, $34,200 § 1245 recapture gain, $0 § 1231 loss.
d. $0 § 1231 gain, $10,800 § 1245 recapture gain, $34,200 § 1231 loss.
e. None of the above.

a
RATIONALE: Since the machine was held more than 12 months and was depreciated, it was a § 1231 asset. Since it was sold at a gain and the selling price did not exceed the original cost, all of the depreciation taken of $34,800 ($69,000 cost – $34,200 adjusted basis), limited to the recognized gain of $10,800 ($45,000 amount realized – $34,200 adjusted basis), is gain recaptured by § 1245.