A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, machinery, land, timber and other natural resources, unharvested crops, cattle, livestock and leaseholds that are at least a year old.
Section 1231 gains and losses are netted against each other in the same manner as capital gains and losses, except that a net section 1231 gain is considered a capital gain, while a net section 1231 loss is classified as an ordinary loss.
