Broco lives in an apartment building and has a two-year lease that began thirteen months ago. His landlord is willing to pay Broco $5,000 to vacate the apartment immediately. The landlord wants to sell the building to a buyer who will convert the building into condominiums. Broco's lease on the apartment is a capital asset, but has no tax basis. The $5,000 Broco will receive if he accepts the landlord's offer will be:

Broco lives in an apartment building and has a two-year lease that began thirteen months ago.  His landlord is willing to pay Broco $5,000 to vacate the apartment immediately.  The landlord wants to sell the building to a buyer who will convert the building into condominiums.  Broco's lease on the apartment is a capital asset, but has no tax basis.  The $5,000 Broco will receive if he accepts the landlord's offer will be:

a.     An ordinary gain.

b.    A short-term capital loss.

c.     A long-term capital gain.

d.    A short-term capital gain.

e.     Excludible from gross income.