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Bruce receives 200 stock rights in a nontaxable distribution. The stock rights have an FMV of $20,000. The common stock with respect to which the

Bruce receives 200 stock rights in a nontaxable distribution. The stock rights have an FMV of $20,000. The common stock with respect to which the rights are issued has a basis of $40,000 and an FMV of $800,000. Bruce sells the stock rights for $15,000. What is his gain or loss on the sale of the right?

a. $0

b. $10,000 loss

c. $7,000 gain

d. $15,000 gain

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