Hector Receives a Gift of Rare Books Valued at $7,000

Hector receives a gift of rare books valued at $7,000. The books have an adjusted basis of $11,000 to the donor. Several months later, Hector sells the books to a professional collector for $8,000. What is Hector's gain or (loss) on the sale?

A) $1,000 gain
B) $4,000 gain
C) No gain or loss is recognized
D) $1,000 loss
E) $3,000 loss