Such term includes timber, coal, and iron ore with respect to which section 631 applies. (D) a publication of the United States Government (including the Congressional Record) which is received from the United States Government, or any agency thereof, other than by purchase at the price at which it is offered for sale to the public, and which is held by a taxpayer described in paragraph (5) of section 1221(a). (C) a patent, invention, model or design (whether or not patented), a secret formula or process, a copyright, a literary, musical, or artistic composition, a letter or memorandum, or similar property, held by a taxpayer described in paragraph (3) of section 1221(a), or (B) property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business, (A) property of a kind which would properly be includible in the inventory of the taxpayer if on hand at the close of the taxable year, The term 'property used in the trade or business' means property used in the trade or business, of a character which is subject to the allowance for depreciation provided in section 167, held for more than 1 year, and real property used in the trade or business, held for more than 1 year, which is not. (b) Definition of property used in the trade or businessДЇor purposes of this section- (1) General rule This subsection shall not apply to such conversion (whether resulting in gain or loss) if during the taxable year the recognized losses from such conversions exceed the recognized gains from such conversions. (ii) any capital asset which is held for more than 1 year and is held in connection with a trade or business or a transaction entered into for profit, (C) In the case of any involuntary conversion (subject to the provisions of this subsection but for this sentence) arising from fire, storm, shipwreck, or other casualty, or from theft, of any. Shall be treated as losses from a compulsory or involuntary conversion. (ii) capital assets which are held for more than 1 year and are held in connection with a trade or business or a transaction entered into for profit, (i) property used in the trade or business, or (B) Losses (including losses not compensated for by insurance or otherwise) on the destruction, in whole or in part, theft or seizure, or requisition or condemnation of. (ii) the section 1231 losses shall be included only if and to the extent taken into account in computing taxable income, except that section 1211 shall not apply. (i) the section 1231 gains shall be included only if and to the extent taken into account in computing gross income, and (A) In determining under this subsection whether gains exceed losses. The term 'section 1231 loss' means any recognized loss from a sale or exchange or conversion described in subparagraph (A). (II) any capital asset which is held for more than 1 year and is held in connection with a trade or business or a transaction entered into for profit. (I) property used in the trade or business, or (ii) any recognized gain from the compulsory or involuntary conversion (as a result of destruction in whole or in part, theft or seizure, or an exercise of the power of requisition or condemnation or the threat or imminence thereof) into other property or money of.

(i) any recognized gain on the sale or exchange of property used in the trade or business, and

(3) Section 1231 gains and lossesДЇor purposes of this subsection- (A) Section 1231 gain Such gains and losses shall not be treated as gains and losses from sales or exchanges of capital assets.

(A) the section 1231 gains for any taxable year, do not exceed Such gains and losses shall be treated as long-term capital gains or long-term capital losses, as the case may be. (B) the section 1231 losses for such taxable year, (A) the section 1231 gains for any taxable year, exceed Property used in the trade or business and involuntary conversions (a) General rule (1) Gains exceed losses Jump To: Source Credit Miscellaneous Amendments Effective Date В§1231.

Irc 1231