### Question
How does the law define qualified liquidation?


### Answer
Under *26 U.S.C. § 860F*, **qualified liquidation** is defined as:

> a transaction in which—



(i) the REMIC adopts a plan of complete liquidation,



(ii) such REMIC sells all its assets (other than cash) within the liquidation period, and



(iii) all proceeds of the liquidation (plus the cash), less assets retained to meet claims, are credited or distributed to holders of regular or residual interests on or before the last day of the liquidation period

#### Citation:
  - *26 U.S.C. § 860F*
  - 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**

