Jessica Dobson is a single taxpayer who recently sold her home for a gain of 400,000. She had owned and lived in the home for the past 10 years. What is the amount and character of her gain on the sale?
1) 400,000 of ordinary income or gain
2) 150,000 of short-term capital gain
3) 150,000 of long-term capital gain
4) 400,000 of long-term capital gain
5) 1,500,000 of ordinary income gain