Ned Stark gifted his son Jon, Dragon, Inc. stock worth $10,000 FMV on January 1st of this year. Prior to the gift, Ned owned the stock for 3 years and had a basis of $15,000. Jon subsequently sells the stock for $8,000 on September 1st of this year.

What are the tax consequences for Jon upon the sale? Please explain:

A. $2,000 short-term capital loss

B. $2,000 long-term capital loss (incorrect)

C. $7,000 short-term capital loss (incorrect)

D. $7,000 long-term capital loss