Hugo Inc, a Calendar Year Taxpayer, Sold Two Operating Assets This

Hugo Inc., a calendar year taxpayer, sold two operating assets this year. The first sale generated a $38,700 Section 1231 gain, and the second sale generated a $59,400 Section 1231 loss. As a result of these sales, Hugo should recognize:

A) $20,700 ordinary loss
B) $38,700 Section 1231 gain treated as capital gain and $59,400 ordinary loss
C) $20,700 capital loss
D) None of these choices are correct