### Question
How is the "disqualified leaseback or long-term agreement" defined?


### Answer
The term **disqualified leaseback or long-term agreement** is defined in *26 U.S.C. § 467* as follows -

> any section 467 rental agreement if—



(A) such agreement is part of a leaseback transaction or such agreement is for a term in excess of 75 percent of the statutory recovery period for the property, and



(B) a principal purpose for providing increasing rents under the agreement is the avoidance of tax imposed by this subtitle

#### Citation:
  - *26 U.S.C. § 467*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter E-Accounting Periods and Methods of Accounting > PART II-METHODS OF ACCOUNTING > Subpart C-Taxable Year for Which Deductions Taken**

