There is no simple answer to this unfortunately, when determining what character of gain you have when you sell a business, it is most important to determine what type of asset you are selling and what type of entity the asset was held in. The three most common categories are section 1231, 1245 and 1250 property.
Here's some main points of distinguishing between the three
- 1231 property are assets used in your trade or business held by you for more than one year. This could be your carpet cleaning machine for instance if it was for the sole purpose of business.
- 1245 property is all depreciable personal property and some other real depreciable property but not buildings or structural components
- 1250 property is depreciable property that is not 1245 property, in other words does not fall into the 1245 category such as a leasehold of land
These are only very basic descriptions just meant to give some idea of what each can be
The guidelines for character of sale can be confusing, the IRS has laid out a full description of each, and can help you determine what you have, I have provided a link below if you want to read into more detail
http://www.irs.gov/publications/p544/ch03.html#en_US_2013_publink100072560
