Tag Archives: AV

Averaging

Averaging

Description and Definition of Averaging

If you receive a lump-sum distribution from a pension plan you can elect either five year or ten year averaging on Form 4972 if you were born before 1936 or are 591/2 or over provided you participated in the plan for at least five years.

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Average Daily Production

Average Daily Production

Average Daily Production means:
a taxpayer's aggregate production of domestic crude oil or natural gas during the taxable year divided by the number of days in that year. The independent producers' and royalty owners' exemption for percentage depletion method is based on a maximum of 1,000 barrels per day.

Avoided-cost Method

Avoided-cost Method

Avoided-cost Method means:
the method required under uniform capitalization rules for capitalizing interest into the cost of manufactured or produced property. The avoided-cost method concerns the allocation of interest incurred on debt that is not directly traceable to the property's cost of production but could have been reduced if the production cost had not been incurred.

This method assumes that repayment of the debt occurs, regardless of the taxpayer's intention or the facts and circumstances surrounding the operation. The avoided-cost method must be applied regardless of whether or not the amounts used for production would otherwise have been used to repay the debt.

Avoiding Probate

Avoiding Probate

Avoiding Probate means:
the use of certain techniques to eliminate assets from the legal probate process. Jointly held property, living trusts, and lifetime giving are some ways to avoid probate. Avoiding probate does not enable a person to avoid the federal estate or gift tax.

Avoidance of Tax

Avoidance of Tax

Avoidance of Tax means:
a method by which a taxpayer legally reduces his or her tax liability, for example, by investing in a tax shelter. Avoidance is a term that is difficult to define but which is generally used to describe the arrangement of a taxpayer's affairs that is intended to reduce his tax liability and that although the arrangement could be strictly legal it is usually in contradiction with the intent of the law it purports to follow.Contrast with evasion and tax evasion. Former IRC (check if this IRC provision is current here) §§269 and 269A.

See Offshore Bank in the American Encyclopedia and Offshore Bank in the World Encyclopedia.

See Tax Evasion in the U.S. Encyclopedia of Law and Tax Evasion in the World Encyclopedia of Law.