Six Years Ago, Linus Corporation Granted Pauline an Incentive Stock

Six years ago, Linus Corporation granted Pauline an incentive stock option (ISO) to purchase 5,000 shares of Linus stock for $13 per share. On date of grant, the market price was $11 per share. Last year, Pauline exercised the option when the market price was $47 per share. This year, she sold the stock for $40 per share. Compute Pauline's gain or loss recognized on sale.

A) $135,000 gain
B) $10,000 loss
C) $35,000 loss
D) No gain or loss on sale