In 20X0, Bridget sold land to her son Caleb for $150,000 cash and an installment note for $600,000. Bridget's adjusted basis was $550,000. In 20X2, after paying $10,000 interest but nothing on the principal, Caleb sold the land for $850,000 cash. As a result of the second disposition, what gain must Bridget recognize in 20X2?

$600,000

$200,000

$160,000

$40,000

None of the above