I guess I was completely wrong about the idea that the 1250 gain is not part of the 1231 gain.  Hmmm, I'll need to think about that one.

But I tested it out, and it seems to be working correctly.  Form 4797 and Schedule D still shows the proper TOTAL gain as it should.  The amount on Line 19 of Schedule D is *NOT* an 'additional' gain; it is just saying of the total gain, Line 19 is 1250 Gain.