LO.6, 10 Ray Crockett sold 1,000 shares of his stock in Yellow, Inc., an S corporation.

He sold the stock for $13,240, after he had owned it for five years. Ray had paid

$137,400 for the stock, which was issued under § 1244. Ray is married and is the original owner of the 1,000 shares. Determine the appropriate tax treatment of any gain or loss on the stock sale.