### Question
How does the law define prohibited transaction?


### Answer
Under *26 U.S.C. § 857*, **prohibited transaction** is defined as:

> a sale or other disposition of property described in section 1221(1) which is not foreclosure property

#### 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**

