What is the amount and nature of the gain from Maya's sale of office furniture?

To arrive at the correct conclusion about the amount and nature of the gain from Maya's sale of office furniture, it is essential to understand the distinctions between Section 1245 and Section 1231 gains.

Section 1245 property generally includes tangible personal property, like office furniture, that is depreciable. When such property is sold, any gain up to the amount of depreciation taken is treated as ordinary income. The remaining gain, if any, is treated as a Section 1231 gain, which can benefit from capital gains treatment, provided specific requirements are met.

In this scenario, the correct choice states there is a $4,714 Section 1245 gain without any Section 1231 gain. This indicates that all depreciation taken on the office furniture has been recaptured as ordinary income under Section 1245, thus fully accounting for the gain within this category. It implies that the sale price minus the adjusted basis of the furniture resulted in a gain equal to the total depreciation taken, meaning there is no excess gain to be classified under Section 1231.

This classification reflects the principles of how gains from the sale of depreciable property are taxed, specifically focusing on the treatment of recaptured depreciation. Therefore, it highlights an important concept in tax