1. On May 13, 2018, a flood destroyed the building in which SDF Inc. manufactured its product. 2. SDF's adjusted tax basis in the building was $984,000. 3. On November 29, 2018, SDF received a $1.2 million reimbursement from its casualty insurance company. 4. On August 1, 2019, SDF paid $1.3 million to purchase a replacement building. Required: 1. Compute SDF's recognized gain. 2. Compute SDF's initial basis in the replacement property