On January 3, year 1, Falk Co. purchased 500 shares of Milo Corp. common stock for $36,000. On December 2, year 3, Falk received 500 stock rights from Milo. Each right entitles the holder to acquire one share of stock for $85. The market price of Milo's stock was $100 a share immediately before the rights were issued, and $90 a share immediately after the rights were issued. Falk sold its rights on December 3, year 3, for $10 a right. Falk's gain from the sale of the rights is

$0

$1,000

$1,400

$5,000