Hope Corporation Was Liquidated Four Years Ago

Hope Corporation was liquidated four years ago. Teresa reported a $40,000 long- term capital gain due to the liquidation on her individual tax return. This year, Teresa pays $6,000 as part of the settlement of a lawsuit against Hope. Due to the $6,000 payment, Teresa recognizes a

A) $6,000 short- term capital loss.
B) $6,000 ordinary loss.
C) $6,000 long- term capital loss.
D) none of the above

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