I:13-25 Ted owns a warehouse that cost $850,000 in 1984. It is subject to depreciation recapture under Sec. 1245 because the warehouse was placed in service after 1980 and before 1987 and accelerated depreciation was used. The warehouse, which has an adjusted basis of zero, is destroyed by a tornado and Ted receives $580,000 from the insurance company. Within nine months, he pays $500,000 for a new warehouse and an election is made to defer the gain under Sec. 1033. What is the amount and character of Ted’s recognized gain?