### Question
How does the law define qualified equity investment?


### Answer
Under *26 U.S.C. § 45D*, **qualified equity investment** is defined as:

> any equity investment in a qualified community development entity if—


(A) such investment is acquired by the taxpayer at its original issue (directly or through an underwriter) solely in exchange for cash,


(B) substantially all of such cash is used by the qualified community development entity to make qualified low-income community investments, and


(C) such investment is designated for purposes of this section by the qualified community development entity

#### Citation:
  - *26 U.S.C. § 45D*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter A-Determination of Tax Liability > PART IV-CREDITS AGAINST TAX > Subpart D-Business Related Credits**

