Taxpayer purchases 100 shares of XYZ Corp on February 1, 20x1 for $100.

Taxpayer sells short 100 shares of XYZ Corp on June 1, 20x1 for $110.

Taxpayer closes the short position on July 1, 20x1, buying 100 shares of XYZ Corp for $90.

Taxpayer sells the original position on February 2, 20x2 for $120.

What is the amount and character to recognize in 20x2?

1. a.$20 Long-term capital gain
2. b.$20 Short-term capital gain
3. c.$10 Short-term capital gain
4. d.$10 Long-term capital gain

Please explain