### Question
Can you define what includible gain means?


### Answer
**Includible gain** is defined as the following in *26 U.S.C. § 644*:

> the lesser of—


(1) the gain recognized by the trust on the sale or exchange of any property, or


(2) the excess of the fair market value of such property at the time of the initial transfer in trust by the transferor over the adjusted basis of such property immediately after such transfer

#### Citation:
  - *26 U.S.C. § 644*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter J-Estates, Trusts, Beneficiaries, and Decedents > PART I-ESTATES, TRUSTS, AND BENEFICIARIES > Subpart A-General Rules for Taxation of Estates and Trusts**

