Tax

Tag: Tax Terms

  • Blocked Income

    Blocked Income means:foreign income that is not available to the earner or owner because of monetary, exchange, or other restrictions imposed by a foreign country. Blocked income is not included in income until it is free of such restrictions. Former IRC (check <a href="http://lawi.us/internal-r…

  • Net Working Capital

    Net Working Capital means:current assets less current liabilities. See also other Tax Terms and Definitions in U.S.A. working capital; Bardahl formula….

  • Composite Depreciation

    Composite Depreciation means:applying one depreciation rate to an entire group of assets. For example, in real estate the foundation and framing of a building may last more than 50 years, whereas the electrical and plumbing systems have much shorter lives, say 20 years. A composite rate provides…

  • Recapture Potential

    Recapture Potential means:any prior depreciation that is subject to recapture. See Depreciation in the United States Encyclopedia of Law and Depreciation in the World Encyclopedia of Law….

  • Stripped Preferred Stock

    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 …

  • Sinking Fund

    Sinking Fund means:money accumulated on a regular basis in a separate custodial account and used to redeem debt securities or preferred stock issues. Putting money in a sinking fund does not provide a tax deduction; interest earned on the sinking fund is taxable….

  • Phantom Taxable Income

    Phantom Taxable Income means:income that arises because estates and trusts are not allowed to deduct part of certain items (such as passive activity losses and personal or consumer interest) and because income tax laws and state laws differ concerning principal and income interests. See also <a …

  • Leasehold Improvements

    Leasehold Improvements means:fixtures attached to real estate that are generally acquired and installed by the lessee. Upon expiration of the lease, the tenant can generally remove them, provided that such action does not damage the property or conflict with the lease. For example, the cabinets,…

  • Business Energy Credit

    Business Energy Credit means:credit based on electricity sold to unrelated persons and produced from qualified energy resources at a qualified facility during the 10-year period after the facility is placed in service. The credit equals 1.5 cents (adjusted for inflation) per kilowatt hour of suc…

  • Investment Income

    Investment Income means:portfolio income such as dividends, interest, and gains from the sale of investment property. Income derived from the investment of capital, whether money or other property, in income-producing assets or in a profit-making venture without active participation in the produ…