Knox Cable Corporation Has the Following Gains and Losses from Section

Knox Cable Corporation has the following gains and losses from Section 1231 property during 2018:
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$$\begin{array} { l r } \text { Casualty losses } & \$ ( 14,000 ) \\\text { Casualty gains } & 5,000 \\\text { Section } 1231 \text { gains } & 9,000 \\\text { Section } 1231 \text { losses } & ( 6,000 ) \end{array}$$
No net Section 1231 losses have been deducted as ordinary losses in prior years. How will this information affect Knox's 2018 taxable income?

A) Knox will report a net section 1231 loss of $6,000.
B) Knox will report a capital loss of $9,000 and ordinary income of $3,000.
C) The transactions have no effect on Knox's 2018 taxable income.
D) Knox will deduct a $3,000 capital loss and have ordinary income of $3,000.
E) Knox will report an ordinary loss of $9,000 and a long-term capital gain of $3,000.