According to the Tax Court's ruling in Inaja Land Co. v. Commissioner, how should the payment be treated for tax purposes?

A. As a reduction of the taxpayer's cost basis, without being subject to tax if it does not exceed the basis of the property
B. As a reduction of the taxpayer's cost basis, but only if it exceeds the basis of the property
C. As taxable income, subject to ordinary income tax rates
D. As a deductible loss, eligible for a tax refund
Answer: 