Darren sold Section 1245 property for $200,000, to be paid with 6% interest over five annual payments of $40,000, with the first payment due this year. Darren purchased the property for $150,000 several years ago and claimed depreciation of $25,000. What amount of capital gain will Darren report in the year of sale using the installment method?

Multiple Choice

a) $40,000

b) $25,000

c) $35,000

d) $10,000