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


### Answer
The term **qualified debt instrument** is defined in *26 U.S.C. § 1274A* as follows -

> any debt instrument given in consideration for the sale or exchange of property (other than new section 38 property within the meaning of section 48(b), as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) if the stated principal amount of such instrument does not exceed $2,800,000

#### Citation:
  - *26 U.S.C. § 1274A*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter P-Capital Gains and Losses > PART V-SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS > Subpart A-Original Issue Discount**

