### Question
How is the "nonpurpose investment" defined?


### Answer
The term **nonpurpose investment** is defined in *26 U.S.C. § 148* as follows -

> any investment property which—


(i) is acquired with the gross proceeds of an issue, and


(ii) is not acquired in order to carry out the governmental purpose of the issue

#### Citation:
  - *26 U.S.C. § 148*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IV-TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS > Subpart B-Requirements Applicable to All State and Local Bonds**

