Henry has a tradition 401k defined contribution plan. Henry had originally contributed $8,000 to the 401k plan. The plan invested in IBM stock. The value of the stock was $20,000 and Henry took a distribution of the stock when he was 65 years old. Which is true?

Select one:

a. Henry will be taxed on $12,000 as a LTCG

b. $8000 is a return of capital and $12,000 will taxed as ordinary income.

c. Henry will be taxed on $12,000 as a LTCG and $8000 as ordinary income.

d. $20,000 will be taxed as ordinary income.