### Question
What does net section 1256 contracts loss mean?


### Answer
**Net section 1256 contracts loss** has the following meaning in *26 U.S.C. § 1212*:

> the lesser of—



(A) the net capital loss for the taxable year determined by taking into account only gains and losses from section 1256 contracts, or



(B) the sum of the amounts which, but for paragraph (6)(A), would be treated as capital losses in the succeeding taxable year under subparagraphs (A) and (B) of subsection (b)(1)

#### Citation:
  - *26 U.S.C. § 1212*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter P-Capital Gains and Losses > PART II-TREATMENT OF CAPITAL LOSSES**

