Brad sold a rental house that he owned for $254,000. Brad bought the rental house five years ago for $221,000 and has claimed $52,000 of depreciation expense. What is the amount and character of Brad's gain or loss?

Multiple Choice

• $85,000 capital gain.
• $33,000 §1231 gain and $52,000 unrecaptured §1250 gain.
• $85,000 ordinary gain.
• None of the choices are correct.
• $33,000 ordinary and $52,000 unrecaptured §1250 gain.