Dreamland Corporation Purchased 10,000 Shares of Sleepytime, Inc

Dreamland Corporation purchased 10,000 shares of Sleepytime, Inc. common stock for $200,000 on February 19, 2013. On December 31, 2013, the value of the Sleepytime stock declines to $180,000. Dreamland sells the Sleepytime stock for $170,000 on January 10, 2014. Dreamland does not recognize a loss on the stock in 2013, but does recognize a loss of $30,000 in 2014. Which of the following Concepts, Constructs, and/or Doctrines form the basis for this treatment? I. Realization Concept. II. Related Party Provisions. III. Capital Recovery Concept. IV. Tax Benefit Rule.

A) Statements I and II are correct.
B) Statements I and III are correct.
C) Statements II and IV are correct.
D) Statements I, II and III are correct.
E) Statements I, III and IV are correct.