### Question
How does the law define eligible gain?


### Answer
Under *26 U.S.C. § 1202*, **eligible gain** is defined as:

> any gain from the sale or exchange of qualified small business stock held for more than 5 years

#### Citation:
  - *26 U.S.C. § 1202*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter P-Capital Gains and Losses > PART I-TREATMENT OF CAPITAL GAINS**

