Net section 1256 contract gain

For purposes of paragraph (1)—

(A) In general The term “net section 1256 contract gain” means 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.

(B) Special rule The net section 1256 contract gain for any taxable year before the loss year shall be computed without regard to the net section 1256 contracts loss for the loss year or for any taxable year thereafter.