### Question
How does the law define undistributed capital gain?


### Answer
Under *26 U.S.C. § 857*, **undistributed capital gain** is defined as:

> the excess of the net capital gain over the deduction for dividends paid (as defined in section 561) determined with reference to capital gain dividends only

#### Citation:
  - *26 U.S.C. § 857*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter M-Regulated Investment Companies and Real Estate Investment Trusts > PART II-REAL ESTATE INVESTMENT TRUSTS**

