### Question
How does the law define annualized includible compensation for the base period?


### Answer
Under *26 U.S.C. § 280G*, **annualized includible compensation for the base period** is defined as:

> the average annual compensation which—



(A) was payable by the corporation with respect to which the change in ownership or control described in paragraph (2)(A) of subsection (b) occurs, and



(B) was includible in the gross income of the disqualified individual for taxable years in the base period

#### Citation:
  - *26 U.S.C. § 280G*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IX-ITEMS NOT DEDUCTIBLE**

