### Question
How does the law define disqualified investment corporation?


### Answer
Under *26 U.S.C. § 355*, **disqualified investment corporation** is defined as:

> any distributing or controlled corporation if the fair market value of the investment assets of the corporation is—


(i) in the case of distributions after the end of the 1-year period beginning on the date of the enactment of this subsection, 2/3 or more of the fair market value of all assets of the corporation, and


(ii) in the case of distributions during such 1-year period, ¾ or more of the fair market value of all assets of the corporation

#### Citation:
  - *26 U.S.C. § 355*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter C-Corporate Distributions and Adjustments > PART III-CORPORATE ORGANIZATIONS AND REORGANIZATIONS > Subpart B-Effects on Shareholders and Security Holders**

