### Question
How is the "qualified funding asset" defined?


### Answer
The term **qualified funding asset** is defined in *26 U.S.C. § 130* as follows -

> any annuity contract issued by a company licensed to do business as an insurance company under the laws of any State, or any obligation of the United States, if—


(1) such annuity contract or obligation is used by the assignee to fund periodic payments under any qualified assignment,


(2) the periods of the payments under the annuity contract or obligation are reasonably related to the periodic payments under the qualified assignment, and the amount of any such payment under the contract or obligation does not exceed the periodic payment to which it relates,


(3) such annuity contract or obligation is designated by the taxpayer (in such manner as the Secretary shall by regulations prescribe) as being taken into account under this section with respect to such qualified assignment, and


(4) such annuity contract or obligation is purchased by the taxpayer not more than 60 days before the date of the qualified assignment and not later than 60 days after the date of such assignment

#### Citation:
  - *26 U.S.C. § 130*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART III-ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME**

