A business taxpayer sells depreciable business property with an adjusted basis of $40,000 for $32,000. The taxpayer held the property for more than a year. The taxpayer has an $8,000 § 1231 loss.

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Section 1231 losses occur when depreciable business property is sold for less than its adjusted basis, and the property was held for more than a year. The loss is calculated as the adjusted basis ($40,000) minus the sale price ($32,000), resulting in an $8,000 loss.

A Business Taxpayer Sells Depreciable Business Property with an Adjusted