Pedro owns 100 shares of COBM Corporation stock with a basis of $40,000. Pedro receives two liquidating distributions, including $16,000 paid last year and $20,000 paid in the current year. An additional distribution of an undetermined amount is expected next year. On last year's tax return, Pedro can recognize a loss of

A) $0.

B) $1,000.

C) $4,000.

D) $14,000.

Please provide an explanation, thank you!