Tax Gains and Losses: What is the nature of the gain or loss from the Magenta sale of machine?

Magenta, Inc., purchases used equipment at auction, refurbishes it, and then resells it at a profit.  Magenta purchased a 500,000-pound metal-grinding machine for $1.8 million, spent $600,000 refurbishing it over two years, and then sold it for $4 million.  What is the nature of the gain or loss from this transaction?