### Question
Can you define what qualified trade or business means?


### Answer
**Qualified trade or business** is defined as the following in *26 U.S.C. § 302*:

> any trade or business which—



(A) was actively conducted throughout the 5-year period ending on the date of the redemption, and



(B) was not acquired by the corporation within such period in a transaction in which gain or loss was recognized in whole or in part

#### Citation:
  - *26 U.S.C. § 302*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter C-Corporate Distributions and Adjustments > PART I-DISTRIBUTIONS BY CORPORATIONS > Subpart A-Effects on Recipients**

