Tag: Tax Definitions

  • Circular 230

    Circular 230 means: an U.S. Internal Revenue Service (IRS) publication that sets forth the requirements and responsibilities of professional preparers of tax returns. The statement details educational, ethical, and procedural guidelines. Treasury Department Circular No. 230 – Regulations […]

  • Grantor Trust

    Grantor Trust means:a trust that has beneficiaries other than the grantor but, because interests or certain powers over the trust, are retained, all income of the trust is taxed to the grantor. Former IRC (check if this IRC provision is current here) §§671-677. Description and […]

  • Audit

    Tax Audit Audit means: an examination and verification, in a taxation context, of a taxpayer's books and records by the U.S. Internal Revenue Service. Examination and verification carried out by an outside agency (such as an accountancy firm or the tax authorities) of a taxpayer's books and […]

  • Tax-sheltered Annuity

    Tax-sheltered Annuity Tax-sheltered Annuity means:a retirement plan invested in annuities or a mutual fund custodial account for employees of a public school system or an exempt educational, charitable, or religious organization. The employee's rights must be nonforfeitable, and the […]

  • Severance Pay

    Severance Pay means:an income bridge provided by some employers for employees going from employment to unemployment. Severance pay is taxable in the year received. Description and Definition of Severance Pay Money paid by an employer at the end of employment. Severance pay is taxable. […]

  • Wash Sale

    Wash Sale means:a sale or other disposition of stock or securities at a loss accompanied by a purchase of substantially identical stock or securities during a period beginning 30 days before the date of sale or other disposition and ending 30 days after that date-a total of 61 days. The […]

  • Bond

    Bond means:an obligation to pay. Most federal, municipal, and corporate bonds pay interest twice a year (semiannually). Interest on municipal bonds is generally nontaxable for federal income tax purposes and in the municipality of issue. Interest on federal government bonds is taxable […]

  • Applicable Federal Rate

    Applicable Federal Rate means:an interest rate determined monthly and based on the rate paid by the federal government on borrowed funds. An AFR is provided for short-term, mid-term, and long-term debt. If a seller-financed mortgage provides a rate that is less than the AFR, interest […]

  • Foreign Earned Income Exclusion

    Foreign Earned Income Exclusion means:an allowed exclusion of up to $70,000 of foreign earned income by a qualifying person working abroad for at least 330 full days out of any period of 12 consecutive months. The person must have a tax home in a foreign country and meet either a bona […]

  • Disposition

    Disposition means:a transaction, such as a sale, that gives rise to a gain or loss under Former IRC (check if this IRC provision is current here) §1001. Disposable Earnings and California Tax For more information about taxes in California, click here. Description and Definition of […]