### Question
How does the law define disqualified guarantee?


### Answer
Under *26 U.S.C. § 163*, **disqualified guarantee** is defined as:

> any guarantee by a related person which is—



(I) an organization exempt from taxation under this subtitle, or



(II) a foreign person

#### Citation:
  - *26 U.S.C. § 163*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART VI-ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS**

