In computing NESE, exclude gain or loss from the:

• •

  sale or exchange of a capital asset;

• •

  cutting of timber or disposal of timber, coal or iron ore if section 631 of the IRC applies;

• •

  sale or other disposition of property that is not stock in trade or held primarily for sale to customers in the ordinary course of a trade or business.

Options dealers and commodities dealers compute their NESE including any gains or losses on capital assets acquired in the normal course of their trading.