### Question
How is the "qualified nonrecourse financing" defined?


### Answer
The term **qualified nonrecourse financing** is defined in *26 U.S.C. § 465* as follows -

> 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**

