Sebastian, Inc. has booked it's deferred tax assets, deferred tax liabilities, and current taxes payable for the year. Before closing its books, however, Sebastian has identified the following items which do NOT meet the "more likely than not" standard. For which of the following items would it be appropriate for Sebastian to create a valuation allowance?

A. It is not clear if some of the expenses Sebastian is using to calculate its tax credit for research and development expenses qualify as research and development expenses.

B. Sebastian sold some land in the current year, generating a $100,000 capital loss. It does not have any capital gains in the current year or in the prior two years and does not expect to realize any capital gains in the next five years.

C. Sebastian is undergoing a transfer pricing audit related to its operation in Sweden and expects to pay a substantial amount of additional income tax related to this audit.

D. All of the above call for a valuation allowance