Frasier Sells Some Stock He Purchased Several Years Ago for $10,000

Multiple Choice

Frasier sells some stock he purchased several years ago for $10,000 to his brother, Niles, for $6,000.
I.If this is Frasier's only stock transaction, he can deduct only $3,000 of the loss.
II.If Niles sells the stock for $10,000, his taxable gain is $4,000.
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A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.