A client sold an apartment building last year for 100,000, paying a sales commission of 5,000 plus 2,500 in closing costs. The building originally cost 80,000 20 years ago. Total straight-line depreciation of 40,000 had been taken. The building had a mortgage of 60,000 that was assumed by the buyer. The client is in the 24?
1) 37,500
2) 40,000
3) 32,500
4) 52,500