### Question
Can you define what qualified contract means?


### Answer
**Qualified contract** is defined as the following in *26 U.S.C. § 42*:

> a bona fide contract to acquire (within a reasonable period after the contract is entered into) the nonlow-income portion of the building for fair market value and the low-income portion of the building for an amount not less than the applicable fraction (specified in the extended low-income housing commitment) of—


(i) the sum of—


(I) the outstanding indebtedness secured by, or with respect to, the building,


(II) the adjusted investor equity in the building, plus


(III) other capital contributions not reflected in the amounts described in subclause (I) or (II), reduced by


  

(ii) cash distributions from (or available for distribution from) the project

#### Citation:
  - *26 U.S.C. § 42*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter A-Determination of Tax Liability > PART IV-CREDITS AGAINST TAX > Subpart D-Business Related Credits**

