Sarah Gave Her Granddaughter,Alice,some Eli Lilly Co

Sarah gave her granddaughter,Alice,some Eli Lilly Co.stock last year when its fair market value was $25,000.Gift taxes of $4,000 were paid on this transfer.Sarah acquired the stock in 2000 at a cost of $35,000.Alice sold the Eli Lilly stock this year for $32,000.What amount of gain (loss) will Alice recognize from her sale of the stock?

A) No gain or loss is recognized.
B) $7,000
C) ($7,000)
D) ($3,000)