Have you had any ability testing done as well (IQ, etc.)? What type of assessment did they use for the gifted identification?
Sorry to have so many questions, but I am also wondering if you are in a low achieving area. In general, I'd say that it is not unusual for a good 25% or more of 1st graders to be reading at a 2nd grade level which makes me wonder why they are having such a hard time accommodating that. Advanced math isn't always as well accommodated in my experience and slower calculation isn't uncommon among younger children with advanced conceptual understanding of math.
The processing skills like that, simple calculations, etc. might hold him back from significant acceleration like subject acceleration for a bit, though. I wouldn't consider anything major like a grade skip until writing skills are rather advanced and you have IQ scores to support it.
What are they doing so far and what more might you want?