Tax

Tag: Tax Terms

  • Tenancy In Common

    Tenancy In Common means:ownership of realty by two or more persons, each of whom has an undivided interest, without the right of survivorship. Upon the death of one of the owners, the ownership share of the decedent is inherited by the party or parties designated in the decedent's will. See also…

  • Transferee Liability

    Transferee Liability means:liability that is covered by state laws dealing with creditors' rights and by federal laws ensuring priority of payments for federal claims in insolvency situations. Former IRC (check if this IRC provision is c…

  • Investment Indebtedness

    Investment Indebtedness means:indebtedness incurred to carry or purchase investments in assets that produce portfolio income. Limitations are placed on deductions for investment interest expense incurred with respect to the debt. The following do not result from investment indebtedness: • i…

  • Consent Dividends

    Consent Dividends means:hypothetical distributions (as distinguished from actual distributions) that shareholders agree to treat as dividends on their personal tax returns. Each consenting shareholder must include the consent dividends in gross income and increase his or her stock basis. The con…

  • Unrealized Receivables

    Unrealized Receivables means:any rights to payments not already included in income for: • goods delivered or to be delivered, to the extent that the payment would be treated as received for property other than a capital asset. • services performed or to be performed. If a partnership d…

  • Bootstrap Acquisition

    Bootstrap Acquisition means:any of several forms of buyout in which a buyer finances an acquisition in part with the target corporation's excess cash or liquid assets. For example, there may be a sale and seller redemption whereby some of the seller's shares are sold to the purchaser and the rem…

  • Unreasonable Compensation

    Unreasonable Compensation means:owner-employee compensation disallowed as excessive by a revenue agent and reclassified as a disguised dividend in a closely-held corporation setting. Since dividends are not deductible and salaries are, there is an incentive to pay inflated compensation to an emp…

  • Fractional Share

    Fractional Share means:less than one share; any cash received f r fractional shares of a stock dividend is treated as an amount realized on the sale of the fractional shares. The capital gain or loss is the difference between the cash received and the taxpayer's basis in the fractional shares so…

  • Tax-exempt Income

    Tax-exempt Income means:income, including certain Social Security benefits, welfare benefits, nontaxable life insurance proceeds, armed forces family allotments, nontaxable pensions, and tax-exempt interest, that is exempt from taxation (tax-exempt interest income is the Interest income that is …

  • Component Depreciation

    Component Depreciation means:dividing real estate improvements into various parts, such as the roof, plumbing, electrical system, and shell, and then depreciating each component separately for tax purposes. Component depreciation was eliminated by the 1981 Tax Act for acquisitions after 1980. E…