### Question
Can you define what projected earnings means?


### Answer
**Projected earnings** is defined as the following in *26 U.S.C. § 279*:

> the “average annual earnings” (as defined in subparagraph (B)) of—


(i) the issuing corporation only, if clause (ii) does not apply, or


(ii) both the issuing corporation and the acquired corporation, in any case where the issuing corporation has acquired control (as defined in section 368(c)), or has acquired substantially all of the properties, of the acquired corporation

#### Citation:
  - *26 U.S.C. § 279*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IX-ITEMS NOT DEDUCTIBLE**

