A taxpayer buys several lots of Bitcoin for a combined total of $12,500 during TY2021. They convert half of the Bitcoin to Ethereum when the original lot of Bitcoin is worth $20,000. Later, Ethereum drops to half of its value and the taxpayer cashes out the Ethereum buy back into Bitcoin. What is the net taxable effect on the return for the year?

Select one:

a. Gain of $3,750

b. Loss of $5,000

c. Gain of $7,500

d. Loss of $1,250