Investors & landlords

I am confused with this IRS statement -

 

The amount you can carry back to any prior year is limited to the smaller of:

• The gain, if any, that you would report on line 16 of Schedule D (Form 1040) for that carryback year if only gains and losses from section 1256 contracts were taken into account; or

• The gain, if any, reported on line 16 of Schedule D (Form 1040) for that carryback year.

 

Please help!!