Several Years Ago, Y&S Inc

Multiple Choice

Several years ago, Y&S Inc. purchased a patent on a production process for $250,000 and has amortized $91,000 of the cost. Y&S has learned that a rival company recently developed a new process that renders the patent worthless. Consequently, Y&S made a public announcement that it would no longer enforce the patent. What is the tax consequence to Y&S of this unfortunate situation?

A) $159,000 ordinary abandonment loss.
B) $159,000 capital loss.
C) $159,000 Section 1231 loss.
D) Y&S has no tax consequences because it did not sell or exchange the patent.