In February of this year, Betty's grandfather, Francis, died and Betty received shares of Acme Co. stock from him as a bequest under his last will and testament. Francis had purchase the shares for $50,000 just one month prior to his death. While the value of these shares had declined to $35,000 at the time of her death, their price rebounded some, and Betty sold them for $40,000 in June of this year. What is the amount and character of gain or loss recognized by Betty when she sells the Acme Co. shares? a. There is no recognition of gain or loss because Betty realizes no gain or loss when she sells the shares. Characterization of a recognized gain or loss, therefore, is moot. b. Betty has $5,000 of recognized gain. This gain is a short-term capital gain because although, pursuant to IRC 1223(2) he can tack on her holding period that of Francis, the combined holding period is less than one year. c. Betty has $10,000 of recognized loss. This loss is long-term capital loss because, pursuant to IRC 1223(2), she can tack onto his holding period that of Francis. d. Betty has $10,000 of recognized loss