In 1998, Big Skye Partnership paid $695,500 for a Christmas tree farm in northern Arizona. In 1991, over 300 farms and ranches in the area were granted allocations of water from a newly completed irrigation project funded by the U.S. Department of the Interior. This year, Big Skye Partnership discontinued its tree farming operation and converted the property to a sheep ranch. Because the property no longer needed irrigation, Big Skye sold its federal water rights to a neighboring farm for $175,000. What is the amount and character of Big Skye’s gain or loss on disposition of its water rights?