Brenda Sold Investment Land for $200,000 in June

Multiple Choice

Brenda sold investment land for $200,000 in June. Her basis in the land was $75,000. The purchaser paid Brenda $40,000 cash and gave her his 5-year, interest-bearing note for the $160,000 remaining contract price. In December, Brenda received a $20,000 principle payment on the note. Brenda's recognized gain this year is:

A) $125,000
B) $60,000
C) $37,500
D) $22,500