### Question
Can you define what net section 1256 contract gain means?


### Answer
**Net section 1256 contract gain** is defined as the following in *26 U.S.C. § 1212*:

> the lesser of—


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


(ii) the capital gain net income for the taxable year

#### 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**

