Stephen purchased a video game console five years ago for $500. In order to raise money for the “latest and greatest” console, Stephen sold his console for $100. Because of advances in technology, Stephen can purchase the new console for $400. What is the tax treatment of Stephen’s sale of his console?

a. Stephen recognizes a $400 loss

b. Stephen does not report the sale

c. Stephen recognizes a $300 loss

d. Stephen recognizes a $100 gain