After netting all of his short-term and long-term capital gains and losses, Sam has a net short-term capital loss and a net long-term capital gain/ Can he net the ST capital loss and LT capital gain against each other? Why or why not?

Also, Sam purchased equipment for use in his business for $60,000 back in 2014. He has taken $37,500 of regular MACRS depreciation. Sam then sells the equipment in 2017 for $28,500. What is the amount and character of Sam's gain or loss?

Please cite the applicable IRS code section(s) to support your answer. (USA)