Adams, Jefferson, and Madison, unrelated individuals, own the stock in Broadbill Corporation (E & P of $700,000) as follows: Adams, 300 shares; Jefferson, 300 shares; and Madison, 400 shares. Broadbill redeems 200 of Madison's shares (basis of $175,000) for $250,000. If Madison's stock is a capital asset and has been held for over three years, Madison has:

Select one:

A. A long-term capital gain of $75,000.

B. A short-term capital gain of $75,000.

C. Ordinary income of $250,000.

D. Ordinary income of $75,000.

E. None of the above.