Mike sold his vacation home to the St. Edwards Church. The vacation home had a fair market value of $250,000. Mike inherited the vacation home from his father three years prior to the sale when the fair market value of the home was $120,000. Mike's father had an adjusted basis in the vacation home equal to $150,000. The full sales price paid by St. Edwards Church to Mike was $75,000. What amount of capital gain / loss would Mike report on his tax return for the year related to this sale?

Select one:

a. $30,000 capital loss.

b. $39,000 capital gain.

c. $40,000 capital gain.

d. $130,000 capital gain.