### Question
What is the definition of disqualified related party amount?


### Answer
The definition of **disqualified related party amount** is as follows in *26 U.S.C. § 267A*:

> any interest or royalty paid or accrued to a related party to the extent that—


(A) such amount is not included in the income of such related party under the tax law of the country of which such related party is a resident for tax purposes or is subject to tax, or


(B) such related party is allowed a deduction with respect to such amount under the tax law of such country

#### Citation:
  - *26 U.S.C. § 267A*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IX-ITEMS NOT DEDUCTIBLE**

