Tag Archives: AL

Alien

Alien

Alien means:
a person who is not a citizen of the country in which he or she lives. Former IRC (check if this IRC provision is current here) §7701 (b).

See also other Tax Terms and Definitions in U.S.A.

nonresident alien and resident alien.

Tax Treatment of Alien in the U.S. and other Developed Countries

A person who is not a citizen of the country in which he or she lives is an alien. In general, most countries (the United States or Phillipines are here different) do not distinguish between nationals and aliens for tax purposes; rather tax liability is based on residence (most of the countries) and/or domicile (partially, the United Kindom).

Description and Definition of Alien

An alien is a person who is not a citizen of the country in which that person lives.

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Alternative Minimum Tax

Alternative Minimum Tax

About Alternative Minimum Tax:

Alternative Minimum Tax is a special tax designed primarily to ensure that corporate and wealthy individuals (high-income noncorporate taxpayers) pay at least some tax, regardless of their deductions, tax benefits or the use of legal tax breaks. It prevent some taxpayers from a regular tax bill that is reduced in excess due to deductions and other tax considerations. The Alternative minimum tax ignores certain deductions or tax benefits allowed by the regular rules and a two-tier 26% or 28% special rate applies to a larger or broadly based income of an individual taxpayer, a larger amount of income than is hit by regular tax rates. In the case of business, a 20% special rate to broadly based income of a corporation. If the alternative minimum tax exceeds the regular income tax, then the former (the AMT) is to be paid by the taxpayer instead of the regular income tax bill (ie. the person pays either one or another, whichever is higher. The rate is applied to alternative minimum taxable income, which is taxable income increased by tax preferences and adjusted by adding back all or a portion of certain items that were deducted in computing regular taxable income. Former IRC (check if this IRC provision is current here) §55.

The Alternative Minimum Tax had, from the 1990s, more effect on people who live in high-tax states, have many children or exercise incentive stock options, however the net income at their disposal. Main Contributor: Mike Harries.

See Alternative Minimum Tax also in the following sources:Alternative Minimum Tax in the American Legal Encyclopedia and Alternative Minimum Tax in the Worldwide Legal Encyclopedia.

See State Income Tax in the American Encyclopedia of Law.

See Corporate Tax in the U.S. Legal Encyclopedia and Corporate Tax in the International Legal Encyclopedia.

See Tax Rate and Tax Rate.

Description and Definition of Alternative Minimum Tax (AMT)

Alternative Minimum Tax (AMT) is a special tax designed primarily to prevent high-income taxpayers from using so many tax breaks that their regular tax bill is reduced to little or nothing. The tax is triggered if certain tax benefits reduce your regular income tax below the Alternative Minimum Tax computed on Form 6251. AMT applies tax rates of 26% and 28%.

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Alimony

Alimony

About Alimony:

Alimony is a qualifying payment to or for the support of one's former or estranged spouse (ex-spouse) in the course of divorce or separation (agreement) when it is tax deducted. Alimony and separate maintenance payments can be deducted as adjustments to income regardless of whether the payor itemize. They are taxable (included in gross income by the collecting ex-spouse) to the receiver and deductible by the payor (in this late case, the recipient must include the payments in his or her taxable income). Child support and other voluntary payments are not considered alimony for tax purposes. Alimony is deductible for Adjusted Gross Income; child support is not. Former IRC (check if this IRC provision is current here) §§62(10). Main Contributor: Mark Harries.

Description and Definition of Alimony

Payments made to a separated or divorced spouse as required by a divorce decree or agreement. Qualifying payments to an ex-spouse can be deducted as adjustments to income regardless of whether you itemize. They are taxable to the recipient.

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Alternate Valuation

Alternate Valuation

Alternate Valuation means:
a method whereby property included in a decedent's gross estate is valued as of a date other than the date of death. The following rules apply: 1. Any property distributed, exchanged, or otherwise disposed of within 6 months after the decedent's death is valued as of the date of distribution, sale, exchange, or other disposition.

2. Any property not disposed of within 6 months after the decedent's death is valued as of 6 months after the date of death.

3. Any property, interest, or estate that is affected by mere lapse of time is valued as of the date of the decedent's death. Properties affected by the mere lapse of time include patents, remainders, and reversions. The term alternate valuation does not include obligations for the payment of money, whether or not interest bearing.

The election to use alternate valuation applies to all property of the estate except for special-use valuation. The election must be made on the first tax return filed for the estate and must be filed within 1 year of the due date (including extensions) for filing the return. The election may be made only if it will decrease the value of the gross estate and the sum of the estate tax and the generation-skipping tax.

See Inheritance Tax and Inheritance Tax.

All-events Test

All-events Test

All-events Test means:
a test whereby income is considered to be earned by an accrual-basis taxpayer when all of the events have occurred that determine the right to receive such income, and the amount can be determined with reasonable accuracy. Further, this test is used to determine when expenses are deductible by an accrual-basis taxpayer. A deduction is available in the year the expenditure becomes fixed and the amount is determinable with reasonable certainty. Former Tax Regulation (check if this Reg. is current here) §§1.46l-l(a)(2) and 1.466-l(c)(l)(ii).

Alimony Trust

Alimony Trust

Alimony Trust means:
a trust established as a result of separation or divorce. The trust instrument provides for support payments to the grantor's ex-spouse and children, with income-producing property inside the trust. The income that would normally be taxable to the grantor is taxable instead to the spouse receiving the payments. Former Tax Regulation (check if this Reg. is current here) §1.71-l(c)(3).

Alter Ego Theory

Alter Ego Theory

Alter Ego Theory means:
a theory proposing that, when one business has income tax nexus with a state, control and domination may create nexus for its affiliates. Under the theory, domination and control over its affiliates may cause the dominating corporation to be considered the affiliates' alter ego.

See State Income Tax in the American Encyclopedia of Law.

Alternate Valuation Date

Alternate Valuation Date

Alternate Valuation Date means:
a valuation date 6 months (not 180 days) after the decedent's date of death. For estate tax purposes, the executor may place a value on the estate as of the date of death or on the alternate valuation date. To use the alternative valuation date, the estate value and tax on that date must be less than on the date of death. Former IRC (check if this IRC provision is current here) §§10l4(a) and 2032.

See Inheritance Tax and Inheritance Tax.