Lee Sells Equipment (Basis $10,000)to Related Party,Lee Construction Inc

Multiple Choice

Lee sells equipment (basis $10,000) to related party,Lee Construction Inc. ,for $6,000.The $4,000 loss is:

A) Deductible by Lee on his individual return.
B) Not deductible by Lee but Lee Construction has a basis of $10,000 in the asset.
C) Not deductible by Lee but Lee Construction has a basis of $6,000 in the asset.
D) None of these.