Loss treatment of sale of a depreciable asset in same year as purchase

[spencerg]

I have a client that purchased an aircraft for use in his business with the intent of depreciating it.  However, he ended up selling it in the same year as purchase (he bought a different plane ultimately).  He took a loss on the on the overall purchase and sale.  He did have business flights on the plane prior to sale.  

I know we cannot depreciate any amount since the purchase and sale were in the same year, but what would the characteristic of the loss be?  Would that be treated as an ordinary loss since it is a sale of a depreciable asset?  I know it isn't subject to 1231 rules since it was not owned for 1 year or more.  But I don't see that it changes into a capital asset just because it was not owned long enough to be able to use depreciation.  

Sec. 1221 Capital Asset Defined specifically excludes:

(2) property, used in his trade or business, of a character which is subject to the allowance for depreciation provided in section 167, or real property used in his trade or business;

So the property is subject to depreciation, but not owned long enough to take it.  

Thank you!

[sjrcpa]

It's a 1231 loss reportable on Form 4797 Part II.

[spencerg]

thank you!