net income derived from prohibited transactions

(3) Determination of net income For purposes of paragraph (1), the term “net income derived from prohibited transactions” means the excess of the gross income from prohibited transactions over the deductions allowed by this chapter which are directly connected with such transactions; except that there shall not be taken into account any item attributable to any prohibited transaction for which there was a loss.


26 USC § 860F(a)(3)

Scoping language

None identified, default scope is assumed to be the parent (part IV) of this section.
Is this correct? or