Rita Owns a Horse Farm with 450 Acres of Land

Rita owns a horse farm with 450 acres of land (adjusted basis of $900,000) .Twenty-five acres of the land are condemned by the state for $250,000 in order to build a highway.Since the fair market value of Rita's farm is significantly decreased by the proximity to the future highway,the state awards Rita $225,000 in severance damages.Rita does not use the $225,000 to restore the usefulness of the farm and all of the $475,000 proceeds are invested in the stock market.What is her recognized gain or loss associated with the receipt of the severance damages?

A) $0.
B) $225,000.
C) $250,000.
D) $475,000.
E) None of the above.