A warehouse was damaged in a storm. The warehouse was worth $225,000 before the casualty and $65,000 after the casualty. The taxpayer's adjusted basis in the warehouse was $77,000. The insurance company reimbursed the taxpayer $150,000 for its loss. To avoid paying tax on the realized gain, how much must the taxpayer reinvest and in what type of property?

1) $77,000 in another warehouse

2) $150,000 in any other business or investment realty

3) $77,000 in any other business or investment realty

4) $160,00 in another warehouse

5) None of the above.