The Stock in Lark Corporation Is Owned Equally by Olaf

The stock in Lark Corporation is owned equally by Olaf and his grandson Pete.In a liquidation of the corporation in the current year,Lark Corporation distributes land that it purchased in 2006 for $300,000 to Olaf.The property has a fair market value on the date of distribution of $260,000.One year later,Olaf sells the land for $240,000.What loss will Lark Corporation recognize with respect to the distribution of the land?

A) $20,000.
B) $40,000.
C) $60,000.
D) $260,000.
E) None of the above.