Klaus, a landlord, receives $8,000 from Kinta, his tenant. Kinta paid the money as a lease cancellation fee because he was moving to another city. The lease had been in effect for over two years and Klaus had no basis in the lease. Klaus must recognize:

a. A deduction of $8,000.

b. A long -term capital gain of $8,000.

c. A long -term capital loss of $8,000.

d. A short -term capital gain of $8,000.

e. Ordinary income of $8,000.