the loss on sale of business equipment is treated as an ordinary loss. there is a catch. if in the 5 succeeding years, you have net gains under section 1231 the first $42,000 + will be treated as ordinary income
the losses fall under iRC 1231.
If—
(A)the section 1231 gains for any taxable year, do not exceed
(B)the section 1231 losses for such taxable year,
such gains and losses shall not be treated as gains and losses from sales or exchanges of capital assets
your return is reporting correctly.
