There were two PTO choices on those tractors.  The "continuous" PTO has a two-stage foot clutch with ground drive stopping with the foot clutch pressed halfway down, then the PTO stopping with the foot clutch pressed the rest of the way down.  The PTO engagement is a lever on the left side of the transmission housing about where your left heel rests, just in front of the left axle housing.  The "independent" PTO has a single stage ground drive clutch and a separate hydraulically engaged PTO clutch pack controlled by a lever between the two gear shift levers.  It also has the PTO disconnect lever on the left side of the transmission housing which is handy when hooking up an implement because when it is released the tractor PTO shaft is disconnected from the PTO brake and is free to turn.  Both are "live".  I agree with others that a 145 or 146 loader will be plenty for that tractor.  From JDParts it appears that 2040 tractors were only available with the "swept-back" axle which puts more load on the front axle from weight in the loader bucket.