Kathryn has lived in her house for one year. Her company recently relocated to a city 100 miles away, forcing her to move. She purchased her house a year ago for $400,000 and sold it for $525,000, its current fair market value. What amount of gain will Kathryn recognize for Federal tax purposes?
a. $0
b. $62,500
c. $125,000
d. $250,000