In December 2020, Alan, a cash basis taxpayer, paid $5,000 property insurance for the calendar year 2021 on a building he used in his business. Alan deducted the $5,000 insurance premiums on his 2020 tax return. He had $250,000 of taxable income that year. On June 30, 2021, he sold the building and, as a result, received a $2,500 refund on his property insurance premiums. Which of the following statements is true?

a.Alan should include the $2,500 in 2020 gross income in accordance with the claim of right doctrine.

b.Alan should amend his 2020 return and claim $2,500 less insurance expense.

c.Alan should exclude the $2,500 in 2020 gross income in accordance with the tax benefit rule.

d.Alan should include the $2,500 in 2021 gross income in accordance with the tax benefit rule.

e.Alan should add the $2,500 to his sales proceeds from the building