### Question
How does Gain or Loss on Disposition of Property define qualified corporation?


### Answer
Under *26 U.S.C. § 1059*, **qualified corporation** is defined as:

> any corporation (including a predecessor corporation)—


(i) with respect to which the taxpayer holds directly or indirectly during the entire period of such corporation's existence at least the same ownership interest as the taxpayer holds in the corporation distributing the extraordinary dividend, and


(ii) which has no earnings and profits—


(I) which were earned by, or


(II) which are attributable to gain on property which accrued during a period the corporation holding the property was,


  

 a corporation not described in clause (i)

#### Citation:
  - *26 U.S.C. § 1059*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter O-Gain or Loss on Disposition of Property > PART IV-SPECIAL RULES**

