### Question
How does the law define nonseparately computed income or loss?


### Answer
Under *26 U.S.C. § 1366*, **nonseparately computed income or loss** is defined as:

> gross income minus the deductions allowed to the corporation under this chapter, determined by excluding all items described in paragraph (1)(A)

#### Citation:
  - *26 U.S.C. § 1366*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter S-Tax Treatment of S Corporations and Their Shareholders > PART II-TAX TREATMENT OF SHAREHOLDERS**

