Definitions

Low-Income Community – any population census tract in which the poverty rate is at least 20 percent, or the median family income for such tract does not exceed 80 percent of the greater of statewide median family income or the Metropolitan Area median family income.

Qualified Community Development Entity (CDE) – Any domestic corporation or partnership if (A) the primary mission of the entity is serving, or providing investment capital for, Low-Income Communities or Low-Income Persons; (B) the entity maintains accountability to residents of Low-Income Communities through their representation on any governing board of the entity or on any advisory board to the entity; and (C) the entity is certified by the Fund as a CDE.

Qualified Equity Investment –
1. Investment is acquired by taxpayer in exchange for cash
2. 85% is used by the CDE to make qualified low-income community investments
3. Investment is designated as LIC and CDE keeps books/records using any reasonable method.

Qualified Active Low-Income Community Business (QALICB) –
Any corporation (including a nonprofit corporation) or partnership if, for any taxable year:
1) At least 50 percent of the total gross income of such entity is derived from the active conduct of a qualified business within any Low-Income Community (if #2 & #3 satisfied, #1 can be N/A
2) A substantial portion (>=40%) of the use of the tangible property of such entity (whether owned or leased) is within any Low-Income Community;
3) A substantial portion (>=40%) of the services performed for such entity by its employees are performed in any Low-income Community;
4) Less than 5 percent of the average of the aggregate unadjusted bases of the property of such entity is attributable to collectibles (as defined in IRC §408 (m)(2)) other than collectibles that are held primarily for sale to customers in the ordinary course of such business; and
5) Less than 5 percent of the average of the aggregate unadjusted bases of the property of such entity (as defined in IRC §1397C(e)) is attributable to nonqualified financial property.