### Question
Can you define what straight debt means?


### Answer
**Straight debt** is defined as the following in *26 U.S.C. § 1361*:

> any written unconditional promise to pay on demand or on a specified date a sum certain in money if—


(i) the interest rate (and interest payment dates) are not contingent on profits, the borrower's discretion, or similar factors,


(ii) there is no convertibility (directly or indirectly) into stock, and


(iii) the creditor is an individual (other than a nonresident alien), an estate, or a trust described in paragraph (2)

#### Citation:
  - *26 U.S.C. § 1361*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter S-Tax Treatment of S Corporations and Their Shareholders > PART I-IN GENERAL**

