### Question
What is the definition of qualified reserve fund?


### Answer
The definition of **qualified reserve fund** is as follows in *26 U.S.C. § 860G*:

> any reasonably required reserve to provide for full payment of expenses of the REMIC or amounts due on regular interests in the event of defaults on qualified mortgages or lower than expected returns on cash flow investments

#### Citation:
  - *26 U.S.C. § 860G*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter M-Regulated Investment Companies and Real Estate Investment Trusts > PART IV-REAL ESTATE MORTGAGE INVESTMENT CONDUITS**

