What is a “qualified active low-income community business” (Qualified Active Business)?
A “qualified active low-income community business” is defined as a corporation, partnership, or sole proprietorship that meets the following tests: At least 50 percent of its gross income comes from the active conduct of a qualified business within any low-income community. A “substantial portion” of the use of tangible property of the business (whether owned or leased) must be located within a low-income community. A substantial portion of employee services must be performed in a low-income community. No more than 5 percent of the property of the business can be “nonqualified financial property,” generally defined as debt, stock, partnership interests, and various financial instruments (other than reasonable amounts of working capital held in cash or short-term debt instruments or accounts receivable arising from sales of inventory). No more than 5 percent of the property of the business can be works of art or other “collectibles,” unless held for sale to customers. This definition is
