Here is an example to help you understand 1231 loss from IRS:

Here is the link: https://www.irs.gov/instructions/i4797

Example.

You had net section 1231 losses of $4,000 and $6,000 in 2014 and 2015, respectively, and net section 1231 gains of $3,000 and $2,000 in 2018 and 2019, respectively. The 2019 net section 1231 gain of $2,000 is entered on line 7 and the nonrecaptured net section 1231 losses of $7,000 ($10,000 net section 1231 losses minus the $3,000 that was applied against the 2019 net section 1231 gain) are entered on line 8. The entire $2,000 net section 1231 gain on line 7 is treated as ordinary income and is entered on line 12 of Form 4797. For recordkeeping purposes, the $4,000 loss from 2014 is all recaptured ($3,000 in 2018 and $1,000 in 2019), and you have $5,000 of section 1231 losses from 2015 left to recapture ($6,000 minus the $1,000 recaptured this year).