Page:United States Statutes at Large Volume 112 Part 4.djvu/1031

 PUBLIC LAW 105-285—OCT. 27, 1998 112 STAT. 2763 of the average area purchase price apphcable to such residence. (ii) QUALIFIED ACQUISITION COSTS.— The term "quahfied acquisition costs" means the costs of acquiring, constructing, or reconstructing a residence. The term includes any usual or reasonable settlement, financing, or other closing costs. (iii) QUALIFIED FIRST-TIME HOMEBUYER.— (I) IN GENERAL.— The term "qualified first-time homebuyer" means an individual participating in the project involved (and, if married, the individual's spouse) who has no present ownership interest in a principal residence during the 3-year period ending on the date of acquisition of the principal residence to which this subparagraph applies. (II) DATE OF ACQUISITION.—The term "date of acquisition" means the date on which a binding contract to acquire, construct, or reconstruct the principal residence to which this subparagraph applies is entered into. (C) BUSINESS CAPITALIZATION. —Amounts paid from an individual development account directly to a business capitalization account that is established in a federally insured financial institution (or in a State insured financial institution if no federally insured financial institution is available) and is restricted to use solely for qualified business capitalization expenses. In this subparagraph: (i) QUALIFIED BUSINESS CAPITALIZATION EXPENSES. —The term "qualified business capitalization expenses" means qualified expenditures for the capitalization of a qualified business pursuant to a qualified plan. (ii) QUALIFIED EXPENDITURES.— The term "qualified expenditures" means expenditures included in a qualified plan, including capital, plant, equipment, working capital, and inventory expenses. (iii) QUALIFIED BUSINESS. —The term "qualified business" means any business that does not contravene any law or public policy (as determined by the Secretary). (iv) QUALIFIED PLAN.— The term "qualified plan" means a business plan, or a plan to use a business asset purchased, which— (I) is approved by a financial institution, a microenterprise development organization, or a nonprofit loan fund having demonstrated fiduciary integrity; (II) includes a description of services or goods to be sold, a marketing plan, and projected financial statements; and (III) may require the eligible individual to obtain the assistance of an experienced entrepreneurial adviser. (D) TRANSFERS TO IDAS OP FAMILY MEMBERS. —Amounts paid from an individual development account directly into

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