### Question
How is the term permitted investments defined?


### Answer
The term **permitted investments** is defined in *26 U.S.C. § 860G* as the following:

> any—


(A) cash flow investment,


(B) qualified reserve asset, or


(C) foreclosure property

#### Citation:
  - *26 U.S.C. § 860G*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter M-Regulated Investment Companies and Real Estate Investment Trusts > PART IV-REAL ESTATE MORTGAGE INVESTMENT CONDUITS**

