### Question
How is the term factoring discount defined?


### Answer
The term **factoring discount** is defined in *26 U.S.C. § 5891* as the following:

> an amount equal to the excess of—


(A) the aggregate undiscounted amount of structured settlement payments being acquired in the structured settlement factoring transaction, over


(B) the total amount actually paid by the acquirer to the person from whom such structured settlement payments are acquired

#### Citation:
  - *26 U.S.C. § 5891*
  - Heading: **Subtitle E-Alcohol, Tobacco, and Certain Other Excise Taxes > CHAPTER 55-STRUCTURED SETTLEMENT FACTORING TRANSACTIONS**

