As the end of the year was approaching, Ted reviewed his stock portfolio and decided to sell his holdings in XYZ on December 28th of Year 1. The shares were purchased two years ago. His basis in the shares was $20,000 and the market value of the shares was $18,000. Ted wanted to use the $2,000 loss to help him minimize taxes for Year 1. On January 10th, Year 2, XYZ announced new initiatives, and Ted second guessed his decision to sell the shares in the company. He buys back the 1,000 shares for $17,000 on January 11th. Assuming that Ted had no other capital transactions for Year 1, what is the impact of this transaction on Ted's Year 1 income tax return? The sale of XYZ will not impact Ted's AGI for Year 1. The sale will generate a $2,000 short-term capital loss that will reduce Ted's AGI. The sale will generate a $2,000 long-term capital loss that will reduce Ted's AGI. The sale will trigger an ordinary loss deduction for $2,000