During 2016, Ted and Judy, a married couple, decided to sell their residence, which had a basis of $300,000. They got married in 2015. Ted had owned the residence and lived in it for 20 years but Judy had lived in another city prior to their marriage. The exterior of the residence was painted (cost: $6,000) to make the residence more marketable before sale. The residence sold for $880,000. Brokers commissions and other selling expenses totalled $53,000. Since they both are age 68, they decide to rent an apartment, and used the sale proceed to purchase an annuity. What is their realized and recognized gain? SHOW COMPUTATION