### Question
How does Computation of Taxable Income define ratio of debt to equity?


### Answer
Under *26 U.S.C. § 163*, **ratio of debt to equity** is defined as:

> the ratio which the total indebtedness of the corporation bears to the sum of its money and all other assets reduced (but not below zero) by such total indebtedness

#### Citation:
  - *26 U.S.C. § 163*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART VI-ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS**

