Taxable Income re: capital gains

[booyah81]

Is the cap gains/losses included when calculating regular taxable income taken from the income statement? Because if so, I'm wondering how "cap gains/losses less cap gains tax" (the bolded part) comes into play?

[Archen]

Realized capital gain is included in the I/S, so it is taxed. Unrealized capital gain is not relected in the I/S and is directly charged in the Capital&Surplus page, so UCG is not taxed.