### Question
What is the definition of parachute payment?


### Answer
The definition of **parachute payment** is as follows in *26 U.S.C. § 280G*:

> any payment in the nature of compensation to (or for the benefit of) a disqualified individual if—



(i) such payment is contingent on a change—



(I) in the ownership or effective control of the corporation, or



(II) in the ownership of a substantial portion of the assets of the corporation, and


  


(ii) the aggregate present value of the payments in the nature of compensation to (or for the benefit of) such individual which are contingent on such change equals or exceeds an amount equal to 3 times the base amount

#### Citation:
  - *26 U.S.C. § 280G*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IX-ITEMS NOT DEDUCTIBLE**

