### Question
How is the term ordinary income defined?


### Answer
The term **ordinary income** is defined in *26 U.S.C. § 4981* as the following:

> the real estate investment trust taxable income (as defined in section 857(b)(2)) determined—


(A) without regard to subparagraph (B) of section 857(b)(2),


(B) by not taking into account any gain or loss from the sale or exchange of a capital asset, and


(C) by treating the calendar year as the trust's taxable year

#### Citation:
  - *26 U.S.C. § 4981*
  - Heading: **Subtitle D-Miscellaneous Excise Taxes > CHAPTER 44-QUALIFIED INVESTMENT ENTITIES**

