### Question
How is the "applicable debt instrument" defined?


### Answer
The term **applicable debt instrument** is defined in *26 U.S.C. § 108* as follows -

> any debt instrument which was issued by—



(i) a C corporation, or



(ii) any other person in connection with the conduct of a trade or business by such person

#### Citation:
  - *26 U.S.C. § 108*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART III-ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME**

