Stephen purchased a video game console five years ago for $500. In order to raise money for the latest and greatest console, Stephen sold his console for $1,000. Because of advances in technology, Stephen can purchase the new console for $400. What is the tax treatment of Stephens sale of his console?

a. Stephen recognizes a $400 loss.

b. Stephen does not report the sale.

c. Stephen recognizes a $300 loss.

d. Stephen recognizes a $100 gain.