### Question
How does the law define foreign source capital gain net income?


### Answer
Under *26 U.S.C. § 904*, **foreign source capital gain net income** is defined as:

> the lesser of—



(i) capital gain net income from sources without the United States, or



(ii) capital gain net income

#### Citation:
  - *26 U.S.C. § 904*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter N-Tax Based on Income From Sources Within or Without the United States > PART III-INCOME FROM SOURCES WITHOUT THE UNITED STATES > Subpart A-Foreign Tax Credit**

