### Question
How does Income Taxes define excess noncash income?


### Answer
Under *26 U.S.C. § 857*, **excess noncash income** is defined as:

> the excess (if any) of—



(A) the amount determined under paragraph (2) for the taxable year, over



(B) 5 percent of the real estate investment trust taxable income for the taxable year determined without regard to the deduction for dividends paid (as defined in section 561) and by excluding any net capital gain

#### 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**

