Stock Option may have one of the following meanings, depending the context of the term: 1. the right to purchase or sell a stock at a specified price within a stated period. Options are a popular investment medium, offering an opportunity to hedge positions in other securities, to speculate in […]
Stock means:
any shares representing ownership in any corporation or certificates or ownership interest in any corporation. Description and Definition of Stock Stock evidences an ownership interest in a corporation. Resources See Also Further Reading Stock in the West's Tax Law […]
Standard Deduction means:
a provision that allows a taxpayer to deduct, in lieu of itemized deductions, a certain amount of income from his or her gross income. Reduces, therefore, the income subject to tax and varies depending on filing status, age, blindness, and dependency. These […]
Stock Dividend means:
the payment of a corporate dividend in the form of stock rather than cash. In other words, a dividend distribution by a company to its shareholders in the form of additional shares in the company. Often a stock dividend is not taxable, but in certain situations it […]
Stepped-up Basis means:
a process by which a person's tax basis is increased to a certain level (usually the fair market value) as of a certain date. A stepped-up basis generally applies to property received by an heir from a decedent. Former IRC (check if this IRC provision is […]
Description and Definition of Profit and Loss Statement Also known as an income statement, it shows a businesses revenue and expenses for a specific period of time. The difference between the total revenue and the total expense is the businesses net income. Resources See Also Further Reading […]
Description and Definition of Straight Line Depreciation Method A depreciation method that spreads the cost or other basis of an asset on a pro rata basis over its useful life. Resources See Also Further Reading Straight Line Depreciation Method in the West's Tax Law Dictionary Straight […]
Statutory Employee means:
an individual who is not an employee under common law rules but falls into one of the following categories: • an agent or commissioned driver. • a full-time life insurance salesperson. • an individual who works at home with materials or goods and […]
Description and Definition of Stock Split There are two types of stock splits – forward splits and reverse splits. Forward splits increase the number of shares outstanding. For instance, in a Forward Split, if a stock splits 2-for-1, and you hold 1 share before the split, after the split you […]
Description and Definition of Student Loan Interest Interest on college loans can be deducted as an adjustment to income. To qualify for the deduction the debt had to be incurred to pay higher education expenses for you, your spouse, or your dependent. Resources See Also Further Reading […]
Description and Definition of Straddle A stock market strategy of investing in opposite investment positions to protect yourself from a risk of loss. Resources See Also Further Reading Straddle in the West's Tax Law Dictionary Straddle in "A Dictionary of Taxation"
Description and Definition of State Income Tax You may be required to pay a state tax based on your income. At the present time 45 states have enacted an income tax, although 2 of those only tax interest and dividends. You can deduct on your federal income tax return state tax paid in the year […]
Description and Definition of Strategic Planning Defining what you want to accomplish in your business and then identifying the strategic path you will follow to reach your goal in the most efficient and sensible manner. Resources See Also Further Reading Strategic Planning in the West's […]
Description and Definition of Standard Mileage Rate A fixed rate per mile allowed by the IRS for business, charitable, job-related moving, or medical purposes instead of keeping track of and deducting actual expenses, such as gas, maintenance, and depreciation. In any case, you add the cost […]
State Income and Franchise Taxes This entry offer comprehensive coverage of every major aspect of state income taxes, including bankruptcy, … Read more
State Taxes Please select a state from the list below: Alabama Alaska Arkansas Arizona California Colorado Connecticut Delaware District of … Read more
About Start-up Firms: companies for which investors who hold qualified small business stock for at least 5 years may exclude 50% of the gains realized on the disposition of their stock. A qualified small business is a C corporation with less than $25 million of aggregate capitalization from January …
About Stock-for-asset Reorganization: A Stock-for-asset (c-type) Reorganization is a form of reorganization in which an acquiring corporation obtains, solely for all or part of its voting stock (or its parent's voting stock), substantially all of the assets of a second corporation. The “solely for v…
About Straight-line Depreciation: depreciation as determined by a method whereby an equal amount of the cost of an asset is considered an expense for each year of the asset's useful life. Example of Straight-line Depreciation: Lea…
Stipulated Facts are. facts agreed to ahead of time by the parties in a tax or legal dispute….
Stare Decisis (latin legal term) means:
Latin for “to stand by [previously] decided [cases]”; a rule by which courts rely upon judicial precedent as a compelling guide to decisions of cases involving issues similar to those in previous cases….
Statutory Option means:
a category that includes incentive stock options, employee stock purchase plans, qualified stock options, and restricted stock options. Contrast with nonstatutory option….
Stripped Bond means:
a bond that has been separated by a brokerage house into its corpus and coupons, which are then sold separately as zero-coupon securities; also called stripped coupon bond. Inn other words, a bond or debenture from which the interest coupons have been removed and sold separat…
Stockholders' Equity means:
a balance sheet item that shows the book value of ownership in a corporation. Stockholders' equity includes capital stock, paid-in surplus, and retained earnings….
State Death Tax Credit means:
a credit or other debt instrument against the federal estate tax with respect to the adjusted taxable estate (taxable estate minus $60,000). See Inheritance Tax and Inheritance …
Step Transaction Doctrine means:
a doctrine used by the U.S. Internal Revenue Service to collapse a multistep transaction into a single transaction-often taxable. The step transaction doctrine prevents a taxpayer from arranging a series of business transactions (or events) in order to obtain a mo…
Standard Mileage Method means:
a method that permits an automobile expense deduction based on a standard mileage rate, which in 1994 was 29 cents per mile but which will increase in the future. Parking and tolls are allowed in addition to this standard deduction. As an alternative to the standard…
Stock Bonus Plan means:
a type of defined-contribution plan that provides benefits similar to those of a profit-sharing plan. Benefits are payable in the form of a company's stock. Only a corporation can set up a stock bonus plan. Former IRC (check
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Statute means:
a written law; an act of a legislature, under constitutional authority, that becomes law, governing conduct within its scope. Statutes are enacted to prescribe conduct, define crimes, create inferior government bodies, appropriate public monies, and in general promote the public we…
Statutory Nonemployee means:
an individual who falls into one of the following categories established by the U.S. Internal Revenue Service: • direct sellers. • licensed real estate agents. Such persons are treated as self-employed if: 1. substantially all payments for their services are…
Stockholder means:
an individual or organization with an ownership position in a corporation; also called a shareholder or share owner. A stockholder must own at least one share, with ownership evidenced by either a stock certificate or, if shares are in a broker's custody, by the broker's record…
Stripped Preferred Stock means:
preferred stock acquired without dividends included. Purchases of stripped preferred stock after April 30, 1993, are treated essentially the same as those of stripped bonds. See Dividend in the American Legal Encyclopedia and …
Straight Debt means:
debt that. 1. is evidenced by a written unconditional promise to pay a fixed amount on demand, or on a specific date, 2. provides for an interest rate and an interest payment date that are not contingent on the borrower's profits, discretion, or similar factors, or on the pay…
Stapled Stock means:
the combination of a parent company's stock with the stock of a subsidiary company so that neither stock may be transferred without the other. This system is used to avoid controlled foreign corporation status. The Internal Revenue Code provides special ways of handling stapl…
Stock Rights means:
rights to subscribe to additional shares of stock at a set price; stock rights may be offered to some or all shareholders. Normally, such a transaction is nontaxable. Basis Allocation. When the rights represent 15% or more of the market value of the stock in a nontaxable trans…
Stock Appreciation Rights means:
rights granted to an employee entitling him or her to receive, under a nonstock deferred-compensation arrangement, any appreciation in the value of shares of stock. The employee is paid the appreciation in the form of cash, stock, or a combination of the two. The …
Standard Industry Fare Level Rates means:
rates used to place a value on the benefits of air flights on noncommercial aircraft; this value is used in determining the gross income of an employee….
Statutory Merger means:
the legal combination of two or more corporations in which only one survives as a legal entity. A statutory merger differs from a statutory consolidation, in which all the companies in a combination cease to exist as legal entities and a new corporate entity is created. Se…
Statute of Limitations means:
the time period during which the U.S. Internal Revenue Service may assess an additional tax or collect a tax or the taxpayer can file an amended return claim for refund. It is a statute limiting the period within which a specific legal action may be taken, such as th…
Statute of Limitations on Collection means:
the time period (10 years) after assessment of a tax liability during which the U.S. Internal Revenue Service may collect the amount owed (e.g., by levy or through a court proceeding)….
The State Benefit Payments are. payments that, for purposes of the support test for the dependency exemption, are considered support provided by the state. These payments are included in determining the total support of the recipient….
The Start-up Costs are. expenditures incurred after the decision has been made to establish a particular business but before business operations begin. Any amounts paid or incurred in connection with creating or investigating the creation or acquisition of an active trade or business. A taxpayer who…
State, when used in a geographic sense, any of the 50 states and the District of Columbia. Former IRC (check if this IRC provision is current here) §7701(a)(10). For purposes of the Federal Unemployment Tax Act, the term also includes t…