When Pheasant Corporation was formed under 351, Kristen transferred property (basis of $26,000 and fair market value of $22,500) for 1244 stock. Kristens basis in the Pheasant stock is $26,000. Three years later, Pheasant Corporation goes bankrupt and its stock becomes worthless. Kristen, who is single, owned the stock as an investment. Kristens loss is:

	a.	$26,000 capital.
	b.	$22,500 ordinary and $3,500 capital.
	c.	$3,500 ordinary and $22,500 capital.
	d.	$26,000 ordinary.
	e.	None of the above.