On December 20, 2003, Jody moved into a condominium that she owns and had rented to tenants since July 1, 1996. Her cost basis in the condo was 238,440. Jody took depreciation deductions totaling 54,000 for the period that she rented the property. After moving in, she used the residence as her principal residence. Jody sells the property on August 1, 2020, for 538,000. Jody is in the highest marginal income tax bracket for the current year. What is the amount and character of the recognized gain resulting from the sale?
1) 54,000 of unrecaptured Section 1250 income; 49,560 of 'regular' long-term capital gain
2) 54,000 of unrecaptured Section 1250 income; 299,560 of 'regular' long-term capital gain
3) 353,560 'regular' long-term capital gain
4) 54,000 of ordinary income; 49,560 of 'regular' long-term capital gain