What is a section 1231 loss? its operation?

Question

When a secion 1231 loss occurs, what is the tax treatment for it? Is it deductible or nondeductible?

Answer 1

That's not math, so much as tax law.

The IRS says:

"Treatment as ordinary or capital.
To determine the treatment of section 1231 gains and losses, combine all your section 1231 gains and losses for the year.

* If you have a net section 1231 loss, it is ordinary loss.

* If you have a net section 1231 gain, it is ordinary income up to the amount of your nonrecaptured section 1231 losses from previous years. The rest, if any, is long-term capital gain."

Answer 2

Caveats:
1. Only an AA in accounting
2. Not a tax attorney.
3. This isn't really a math question.

According to what I read online, it's a business loss from the sale of business capital assets held for more than a year.

It would seem that a loss or gain from such a disposition would be considered a business loss or gain as would any other.

But, if I got tax advice for free, I would consider it worth about just as much as I paid for it.

I'd suggest you go to a CPA or a tax attorney. If the difference in the tax owed is less than $500, it'll probably cost you more to get qualified advice than to just pay the tax and forget deducting for any loss. You won't go to jail for over-paying taxes.