### Question
How is the term foreign source net capital gain defined?


### Answer
The term **foreign source net capital gain** is defined in *26 U.S.C. § 904* as the following:

> the lesser of—



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



(ii) net capital gain

#### 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**

