In 2005, Duncan purchased 2,000 shares of stock for $50,000 in a midsize local company with gross assets of $15,000,000. In 2017, Duncan sold the stock for $68,000. How is the gain treated for tax purposes?

a. $18,000 capital gain and taxed at preferential rates.

b. $9,000 excluded from gross income under §1202 and $9,000 taxed at regular rates.

c. $9,000 excluded from gross income under §1202 and $9,000 taxed at 28%.

d. $13,500 excluded from gross income under §1202 and $4,500 taxed at preferential rates.