### Question
How is the term property used in the trade or business defined?


### Answer
The term **property used in the trade or business** is defined in *26 U.S.C. § 1231* as the following:

> 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—



(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,



(B) property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business,



(C) 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



(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)

#### Citation:
  - *26 U.S.C. § 1231*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter P-Capital Gains and Losses > PART IV-SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES**

