Tax

Tag: Tax Terms

  • Lump-sum Distribution

    The Lump-sum Distribution are. payment at one time, rather than in installments, of the entire amount of retirement benefits due. The payment within one year of the full amount of your interest in a pension or profit-sharing plan. See also five-year averaging; ten-year averaging subject to […]

  • Net Worth

    Net Worth means:the amount by which the fair market value of all of a corporation's assets exceed its liabilities. With respect to a collapsible corporation, its assets include the amount of any distributions in complete liquidation, and net worth does not include contributions to […]

  • Ordinary Income

    Ordinary Income means:income that is fully subject to ordinary income tax rates (e.g., interest income, dividend income, salary income), as distinguished from income that can benefit from the special tax rates for capital gain (loss). The tax rate for capital gains is less than the […]

  • Capital Loss

    Capital Loss means:the loss from the sale of a capital asset. Individuals are limited to $3,000 of loss that can be used annually to offset ordinary income; corporations may offset capital losses against capital gains but not against ordinary income. An individual may carry a capital […]

  • Land

    Land means:real estate or real property, or any tract that may be conveyed by deed. Land is not subject to depreciation. Generally, the sale of land by anyone other than a dealer results in a capital gain or capital loss. However, if the land is improved by roads, utilities, or other […]

  • Tax-Exempt Interest

    Tax-Exempt Interest means (see more about entries related to interest in the U.S. here) Interest paid on bonds issued by states or municipalities that is tax-free for federal income tax purposes. Although you must report this income on your tax return, it is not taxed. State Income Tax […]

  • Imputed Interest

    Imputed Interest means:implied interest. In a mortgage that states an insufficient interest rate, tax law will impute a higher rate and a lower principal, which will increase taxes on the receipt of payments. Interest the taxpayer are considered to have earned – and therefore owe tax on […]

  • Bond Premium

    Bond Premium means:the amount the purchaser pays in buying a bond that exceeds the face or call value of the bond. The premium can be amortized each year by the bondholder to reflect the fact that the true interest rate is less than the coupon rate. Amortization is elective for taxable […]

  • Section 1250

    Section 1250 means:the part of the Internal Revenue Code that deals with gains from real estate on which accelerated depreciation has been claimed. Gains on residential properties are generally treated as capital gains except to the extent of the accelerated depreciation claimed. Gains […]

  • Residential Rental Property

    Residential Rental Property means:rental units used for dwelling purposes, not of a transient (hotel, motel) nature. For a building to qualify as residential, at least 80% of its income should be derived from dwelling units. This type of property is eligible for a 2772-year life for […]