### Question
How is the "disqualified yield" defined?


### Answer
The term **disqualified yield** is defined in *26 U.S.C. § 163* as follows -

> the excess of the yield to maturity on the obligation over the sum referred to [1](#163_1_target) subsection (i)(1)(B) plus 1 percentage point, and the term “total return” is the amount which would have been the original issue discount on the obligation if interest described in the parenthetical in section 1273(a)(2) were included in the stated redemption price at maturity

#### 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**

