Tag: BU
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Business Property
About Business Property: generally, any property used in a trade or business that is not a capital asset. Business Assets are assets used for purposes of carrying on a business. Business property includes assets specifically excepted from capital asset status, such as: • inventory. • prope…
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Business Activity Codes
About Business Activity Codes: four-digit code numbers for principal business activities, designed to classify an enterprise by the type of activity for the administrative purposes of the U.S. Internal Revenue Service. Business activity codes are similar in format to Standard Industry Classification…
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Business Energy Investment Credit
Business Energy Investment Credit means:a credit or other debt instrument of 10% of the cost of energy property placed in service during the tax year. Energy property is equipment that uses solar energy or geothermal deposits to generate electricity or uses solar energy to provide heating or coo…
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Built-in Gain Tax
Built-in Gain Tax means:a corporate-level tax applied to any unrealized gain attributable to appreciation in the value of all assets held by a C corporation that elects to become an S corporation. The highest corporate rate is applied to the recognized built-in gains of the S corporation for the…
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Business Gift
Business Gift means:a deduction limited to $25 per recipient per year. Advertising items such as pencils, pens, and calendars embossed with a business name and costing $4 or less apiece do not figure into the $25 limitation. Former IRC (check <a href="http://lawi.us/internal-revenue-code-provisi…
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Business Bad Debt
Business Bad Debt means:a debt resulting from the conduct of a taxpayer's trade or business or a debt that became worthless in connection with the taxpayer's trade or business. A business bad debt can be deducted as an ordinary expense when it becomes worthless. A cash basis taxpayer can deduct …
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Bump-and-strip Technique
Bump-and-strip Technique means:a method by which the basis of a second-tier subsidiary stock is stepped or bumped up upon distribution, thereby permitting a later tax-free stripping of funds without creating or increasing an excess loss account (ELA). Under Former Temporary Regulation (check <a …
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Built-in Deduction Limitation
Built-in Deduction Limitation means:a restriction that prevents a group from acquiring a subsidiary with unrealized losses for the purpose of offsetting these losses against income of members of the group….
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Buy-back Agreement
Buy-back Agreement means:a provision in a contract under which the seller of property agrees to repurchase it at a stated price upon the occurrence of a specified event within a certain period of time. Example of Buy-back Agreement: <a href="http://lawi.us/tax-examples-explanations-and-calculat…
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Business Purpose
Business Purpose means:a test applied to various transactions. A transaction must serve a bona fide business purpose, other than a tax purpose, to qualify as a valid transaction for tax purposes. A transaction that takes the form of a corporate reorganization as a disguise to conceal its real ch…