During the year, Henry, a sole proprietor, sold for $65,000 a machine that was used in his business. The machine had been purchased in 2003 for $50,000, and when it was sold it had an adjusted basis of $30,000. How should this gain be treated?
Ordinary income of $35,000
Section 1231 gain of $35,000
Section 1231 gain of $20,000 and ordinary income of $15,000
Section 1231 gain of $15,000 and ordinary income of $20,000
None of the above