### Question
What is the definition of private activity bond?


### Answer
The definition of **private activity bond** is as follows in *26 U.S.C. § 141*:

> any bond issued as part of an issue—



(1) which meets—



(A) the private business use test of paragraph (1) of subsection (b), and



(B) the private security or payment test of paragraph (2) of subsection (b), or


  


(2) which meets the private loan financing test of subsection (c)

#### Citation:
  - *26 U.S.C. § 141*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IV-TAX EXEMPTION REQUIREMENTS FOR STATE AND LOCAL BONDS > Subpart A-Private Activity Bonds**

