### Question
How is the "ratio of debt to equity" defined?


### Answer
The term **ratio of debt to equity** is defined in *26 U.S.C. § 279* as follows -

> the ratio which the total indebtedness of the issuing corporation bears to the sum of its money and all its other assets (in an amount equal to their adjusted basis for determining gain) less such total indebtedness

#### Citation:
  - *26 U.S.C. § 279*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IX-ITEMS NOT DEDUCTIBLE**

