Milaros Pizza was located in Burke, VA. On January 1, 2016, a grease fire from the kitchen completely destroyed the restaurant, which as of that date was valued at $275,000. Luckily, the restaurant had taken out an insurance policy related to this type of accident when they first purchased the restaurant on February 5, 2011 for $185,000, and the company had kept up on the insurance premiums. The accumulated depreciation as of the date of the fire was $50,000. The restaurant received a check from the insurance on July 15, 2016 for the full fair market value as of the date the restaurant as destroyed. The owner immediately paid the money to a construction company to rebuild the exact same restaurant (qualified replacement property) to begin operations by November 15, 2016.

What is the total amount of the gain (or loss) Milaros Pizza recognizes in 2016?

Say that instead of rebuilding the restaurant, the owner instead wants to have a lawn and garden center constructed over the same time period that she would have had the new restaurant built because she was shaken by the experience with the grease fire (no fires from plants!). The lawn and garden center does not qualify as qualified replacement property. Based on this alternative scenario, what is the total amount of the gain (or loss) that must recognized in 2016 now?