Kobe Corporation granted an incentive stock option to employee Lizzy on January 1, 2013. The option price was $150, and the FMV of the Kobe stock was also $150 on the grant date. The option allowed Lizzy to purchase 160 shares of Kobe stock. Lizzy exercised the option on August 1, 2017, when the stock's FMV was $250. Unless otherwise stated, assume Lizzy is a qualifying employee. If Lizzy sells the stock on September 5, 2019, for $350 per share, she must recognize (ignore alternative minimum tax)

A) 0. No gain or loss is recognized at exercise or sale with incentive stock options.

B) long-term capital gain of $16,000 in 2019.

C) ordinary income of $16,000 on the exercise date and a long-term capital gain of $16,000 in 2019.

D) long-term capital gain of $32,000 in 2019.