### Question
What does qualified nonrecourse financing mean?


### Answer
**Qualified nonrecourse financing** has the following meaning in *26 U.S.C. § 465*:

> any financing—



(i) which is borrowed by the taxpayer with respect to the activity of holding real property,



(ii) which is borrowed by the taxpayer from a qualified person or represents a loan from any Federal, State, or local government or instrumentality thereof, or is guaranteed by any Federal, State, or local government,



(iii) except to the extent provided in regulations, with respect to which no person is personally liable for repayment, and



(iv) which is not convertible debt

#### Citation:
  - *26 U.S.C. § 465*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter E-Accounting Periods and Methods of Accounting > PART II-METHODS OF ACCOUNTING > Subpart C-Taxable Year for Which Deductions Taken**

