529 Plan
A 529 plan is a tax-advantaged savings account used to pay qualified education expenses.
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A 529 plan is a tax-advantaged savings account used to pay qualified education expenses.
Retirement account terms for 401(k), IRA, Roth, SEP, SIMPLE, self-employed plans, salary deferrals, and contribution tax treatment.
Accumulated earnings tax is a 20% U.S. federal tax that can apply when a corporation accumulates earnings to avoid shareholder tax beyond reasonable business needs.
Active income generally comes from work or materially participated businesses; earned, nonpassive, ordinary, and portfolio income remain distinct.
Adjusted gross income is a U.S. federal tax measure equal to total income minus eligible adjustments, before standard or itemized deductions.
Adjusted tax basis is an asset's starting tax basis after increases and decreases used to measure gain, loss, depreciation, and other tax items.
After-tax income is income remaining after the taxes assigned to a period, distinct from taxable income, withholding, and take-home pay.
After-tax return measures investment performance after accounting for modeled taxes on income, distributions, and realized gains or losses.
After-tax yield estimates the investment income an investor retains after applying relevant taxes to interest, dividends, or distributions.
The UK Annual Investment Allowance permits an immediate deduction for qualifying plant and machinery, subject to the current limit and eligibility rules.
An Applicable Federal Rate is an IRS-published prescribed rate used in specified U.S. tax calculations for loans and deferred-payment transactions.
An arbitrage bond is a state or local bond whose tax-exempt status is threatened by prohibited investment arbitrage on bond proceeds.
Automatic exchange of information is the recurring cross-border transfer of specified financial or tax data between participating tax authorities.
Average tax rate is a defined tax amount divided by a stated income base, used to measure overall rather than marginal tax burden.
U.S. tax concepts for adjusted asset basis, Applicable Federal Rates, below-market loans, imputed interest, and taxable interest income.
Boot is money, nonqualifying property, or certain net liability relief received in a nonrecognition transaction and can cause current gain recognition.
Retirement terms for RRSPs, RRIFs, LIRAs, LRIFs, RPPs, DPSPs, Life Income Funds, Lifetime ISAs, and pension contribution-rate concepts.
A capital gain is the excess of amount realized over adjusted basis when a sale or other disposition produces gain with capital character.
A capital gain distribution, also called a capital gain dividend, passes a fund's net long-term realized gains to shareholders.
Capital gains tax is the income-tax treatment of recognized gains after basis, holding period, loss netting, exclusions, and applicable rates are determined.
A capital loss is a disposition loss with capital character, generally measured when adjusted basis exceeds the applicable amount realized.
A capital loss carryover is an unused net capital loss that enters a later tax year under rules that preserve its short-term or long-term character.
Carried interest is a contractual share of private-fund profits allocated to a manager after the applicable capital-return and waterfall conditions are met.
A charitable donation is a voluntary gift to a qualified organization; any U.S. tax deduction depends on the recipient, property, records, limits, and tax year.
A charitable remainder trust pays noncharitable beneficiaries for life or a fixed term before its remaining assets pass to qualified charity.
The Common Reporting Standard sets due-diligence and reporting rules for exchanging financial-account information among participating tax jurisdictions.
A consolidated tax return combines eligible affiliated corporations in one U.S. federal return, subject to elections, eliminations, basis rules, and loss limits.
A controlled foreign corporation is a foreign corporation more than 50% owned by qualifying U.S. shareholders under U.S. tax ownership rules.
Corporate tax applies to a corporation's taxable income under jurisdiction-specific rules and differs from book tax expense, effective rates, and cash paid.
A corporate tax rate measures tax under a stated legal or analytical definition; statutory, effective, marginal, and cash rates answer different questions.
Current refunding refinances outstanding bonds when the prior bonds are redeemed immediately or within the current-refunding window.
U.S. tax guidance for canceled debt, Form 1099-C, insolvency and bankruptcy exclusions, secured-property dispositions, and QPRI.
Tax terms for deductions, credits, deductible interest, tax shields, tax benefits, and education or incentive expenses.
A deemed dividend arises when tax law treats a corporate transaction or shareholder benefit as a dividend even without a conventionally declared cash dividend.
Distributable net income is a U.S. trust and estate tax measure that limits and characterizes income carried out to beneficiaries.
The U.S. dividends-received deduction lets corporations deduct part of certain eligible intercorporate dividends, subject to ownership and other limits.
Earnings and profits is the U.S. corporate-tax measure used to classify shareholder distributions as dividends, basis recovery, or capital gain.
Educational expenses include tuition, fees, books, supplies, equipment, housing, travel, and financing costs whose treatment depends on the aid or tax benefit used.
An Educational Savings Account (ESA), also known as a Coverdell ESA, is a tax-advantaged investment account designed to encourage saving for future educational expenses.
Effective tax rate compares a defined tax liability or tax expense with a stated income or profit base.
An exempt-interest dividend passes qualifying tax-exempt interest from a mutual fund or other regulated investment company to its shareholders.
FBAR is a separate FinCEN filing for certain U.S. persons whose aggregate foreign financial accounts exceed the reporting threshold.
Federal income tax is the U.S. national tax on taxable income under the Internal Revenue Code, administered by the IRS.
FATCA is a U.S. framework for reporting specified foreign financial assets and accounts connected to U.S. taxpayers.
The U.S. foreign tax credit can reduce double taxation of foreign-source income, subject to creditability, sourcing, category, and limitation rules.
Form 1098 is an information statement reporting mortgage interest and specified loan data; it supports but does not determine a borrower's deduction.
Form 1099-B, officially titled "Proceeds from Broker and Barter Exchange Transactions," is issued by brokers and barter exchanges to taxpayers.
Form 1099-C reports a creditor's cancellation of debt, but the form alone does not determine the borrower's taxable income or legal liability.
A future tax benefit is an expected reduction in later-period tax from a carryforward, deductible temporary difference, credit, or other usable tax attribute.
A generation-skipping transfer is a direct skip, taxable distribution, or taxable termination governed by the U.S. GST tax rules.
A guaranteed payment is a U.S. partnership payment to a partner determined without regard to the partnership's income.
The federal historic tax credit equals 20% of qualified rehabilitation expenditures for a certified income-producing historic building, subject to detailed rules.
Interest on a home-equity loan or HELOC may qualify when proceeds buy, build, or substantially improve the same qualified home securing the debt.
U.S. tax concepts for qualified homes, mortgage interest, home-equity borrowing, Form 1098, debt limits, and proceeds tracing.
Imputed interest is interest that tax rules treat as paid or accrued when a covered loan states too little interest or no interest.
Tax terms for gross income, AGI, MAGI, taxable income, income tax, taxable years, and taxable events.
Income tax is a levy on income measured under the rules of a jurisdiction for individuals, businesses, trusts, and other taxpayers.
Tax terms for taxable income, AGI, deductions, rates, capital gains, tax-exempt income, mortgage interest, and debt discharge.
Tax terms for dividends, capital gains, investment income, capital losses, wash sales, and tax-loss harvesting.
Investment interest expense is interest on debt allocated to property held for investment, with the current U.S. deduction generally limited by net investment income.
An investment tax credit reduces tax for qualifying property or projects under provision-specific eligibility, basis, limitation, and recapture rules.
An involuntary conversion occurs when property is destroyed, stolen, seized, requisitioned, or condemned and may qualify for gain deferral under Section 1033.
IRS Form 8396 calculates the current mortgage interest credit from a qualified MCC and tracks any eligible credit carryforward.
U.S. tax concepts for like-kind real-property exchanges, boot, involuntary conversions, gain recognition, and replacement basis.
A like-kind exchange can defer U.S. federal gain on qualifying business or investment real property when Section 1031 requirements are met.
Long-term capital gains are recognized gains from capital assets generally held for more than one year under U.S. federal tax rules.
The marginal tax rate is the rate applied to the next increment of taxable income under the relevant tax schedule.
Modified adjusted gross income starts with AGI and applies the additions or subtractions required by a specific U.S. federal tax rule.
A mortgage credit certificate can let an eligible homebuyer claim a federal credit for part of qualifying mortgage interest, subject to certificate and tax limits.
U.S. mortgage credit certificate concepts covering eligibility, certified indebtedness, Form 8396, credit limits, and deduction coordination.
The U.S. mortgage interest deduction can reduce taxable income for qualifying interest on secured debt used to buy, build, or improve a main or second home.
U.S. tax concepts for qualified-home mortgage interest, Form 1098, home-equity proceeds, mortgage credit certificates, and Form 8396.
A municipal bond is debt issued by a state, local government, public authority, or similar issuer to finance public projects or operations.
Municipal bond basics covering municipal securities, tax-exempt interest, private-activity bonds, and legal-opinion status.
Municipal, public-purpose, revenue, tax-exempt, savings, and retail government bond terms used in fixed-income analysis.
Net capital gain is the excess of net long-term capital gain over net short-term capital loss under the U.S. federal tax definition.
Net investment income is a context-specific U.S. tax measure used differently for the 3.8% NIIT and the investment-interest deduction limit.
The net investment income tax is a 3.8% U.S. tax on the lesser of net investment income or modified adjusted gross income above a filing-status threshold.
Net unrealized appreciation is the gain in employer securities while held by a qualified retirement plan, with potential special tax treatment after an eligible distribution.
A non-qualified stock option is a nonstatutory compensation option whose spread is generally taxable as ordinary income when exercised under U.S. federal rules.
A non-qualified investment is property that fails the eligibility rules for a particular registered account, plan, or tax regime.
A nondividend distribution generally returns shareholder basis without current U.S. tax, then becomes capital gain after basis has been reduced to zero.
A noncovered security is outside mandatory broker cost-basis reporting for U.S. federal tax purposes, so the taxpayer must substantiate basis.
OPIS was a named U.S. tax-shelter transaction marketed to generate artificial capital losses, not a generic offshore investment strategy.
Ordinary income follows ordinary tax rules rather than capital-gain treatment, but income character and the applicable rate are separate questions.
U.S. partnership-tax concepts affecting partner compensation, allocations, pass-through income, and financial analysis.
A PFIC is a foreign corporation meeting a passive-income or passive-asset test, potentially triggering specialized U.S. shareholder tax and reporting rules.
Passive income commonly means recurring income requiring limited ongoing work, but U.S. passive-activity income excludes many portfolio-income items.
Passive investment income is an S-corporation tax measure used with gross receipts and accumulated earnings and profits to test specified tax consequences.
Per diem rates are daily lodging and meal allowances used to reimburse or substantiate qualifying business-travel expenses under specified rules.
Private activity bonds are municipal bonds whose proceeds materially benefit private users, making tax qualification and conduit credit analysis central.
A private foundation is a Section 501(c)(3) charity that does not qualify as a public charity and is subject to specialized tax and compliance rules.
Profit and loss allocation assigns partnership tax and book items among partners. Learn allocation ratios, special allocations, and distribution differences.
Profit shifting moves taxable profit between entities or jurisdictions; analysts test whether reported outcomes align with economic activity and applicable tax rules.
The profit split method allocates combined profit from controlled transactions between related parties using economically supported relative contributions.
A qualified dividend is an eligible U.S. or foreign corporate dividend that meets distribution and shareholder holding-period rules for preferential federal rates.
Qualified Opportunity Zones (QOZ) allow for tax deferral on capital gains by reinvesting in designated low-income communities to encourage economic development.
Qualified principal residence indebtedness is acquisition debt secured by a main home that can receive time-limited canceled-debt treatment under U.S. federal law.
A qualified residence is a taxpayer's main home or selected second home that meets U.S. mortgage-interest deduction requirements.
Tax terms for marginal rates, average rates, effective rates, brackets, tax liability, and total tax burden.
A regulated futures contract is a defined Section 1256 contract whose margin follows mark-to-market and that is traded on or subject to a qualified board or exchange.
Retirement-finance terms for account wrappers, rollovers, pension design, annuities, public benefits, contribution rules, and retirement income planning.
A Reverse Morris Trust combines a corporate separation with a stock merger while seeking U.S. tax nonrecognition under Sections 355 and 368.
Retirement terms for rollovers, transfers, RMDs, Roth conversions, inherited IRAs, withdrawal systems, and IRA strategy comparisons.
Tax-advantaged savings accounts, ISA, TFSA, RESP, and similar personal-finance account wrappers.
Section 1244 stock may give an eligible original investor ordinary-loss treatment, subject to company, issuance, activity, and annual limits.
The Seed Enterprise Investment Scheme (SEIS) is a UK government initiative aimed at encouraging investment in very early-stage companies.
Selling short against the box pairs a short sale with an existing long position in the same or substantially similar security.
Short-term capital gains and losses are recognized capital results generally associated with assets held for one year or less under U.S. federal rules.
A Tax Anticipation Note (TAN) is a short-term debt security issued by state or municipal governments to finance their immediate expenditures.
Tax benefits are favorable treatments such as credits, deductions, exclusions, deferrals, and preferential rates that can reduce or postpone tax under specific rules.
A tax bracket is a range of taxable income assigned a particular rate within a graduated tax schedule.
Compare tax deferral, tax-deferred accounts, tax-advantaged treatment, and tax efficiency using after-tax cash flows, rules, and risks.
Tax efficiency describes how taxes affect an investment or financial outcome relative to its pretax result, risks, costs, and constraints.
Tax liability is the tax legally owed for a period after applying the relevant tax base, rates, adjustments, and credits, but before settling it with payments.
A tax loss carryback applies an eligible loss to an earlier year, while a carryover applies an unused tax attribute to a later year under attribute-specific rules.
A tax rate is the percentage or per-unit amount applied to a defined tax base to calculate tax.
A tax shield is the expected reduction in cash taxes from an allowed deduction, subject to the taxpayer's rate, taxable income, timing, and deduction limits.
A U.S. tax straddle consists of offsetting positions that can trigger loss-deferral, basis, holding-period, carrying-cost, and reporting rules.
Tax-advantaged describes an account, investment, expense, or transaction that receives favorable tax treatment under specified rules and conditions.
Tax-deductible describes an expense or amount that can reduce taxable income when the taxpayer satisfies the applicable classification and documentation rules.
Tax-deductible interest is borrowing cost allowed to reduce income under a specific business, investment, mortgage, education, or vehicle rule.
A tax-deferred account postpones current tax on earnings or contributions until distribution or another taxable event, subject to account-specific rules.
Tax-deferred growth postpones current tax on investment earnings until withdrawal or another taxable event; it does not make those earnings tax-free.
Tax-equivalent yield converts a tax-exempt yield into the pretax yield a taxable investment would need to provide the same simplified after-tax income.
Tax-exempt means a specified entity, income item, transaction, or property is excluded from a particular tax under applicable rules.
A tax-exempt bond pays interest that may be excluded from regular federal income tax, making after-tax yield central to analysis.
Tax-exempt income is a receipt excluded from a specified income tax under applicable law, although reporting or other tax consequences may remain.
Tax-exempt interest is interest excluded from a specified income tax, commonly qualifying municipal-bond interest under U.S. federal rules.
Tax-exempt yield measures investment income represented as exempt from a specified tax and must be compared using consistent yield and risk assumptions.
Compare taxable and tax-exempt income by separating the security, account wrapper, yield measure, tax rule, and investment risk.
A U.S. tax-free reorganization can defer gain recognition when a corporate transaction satisfies the applicable Internal Revenue Code requirements.
Tax-loss harvesting realizes selected investment losses to offset capital gains or support a capital-loss deduction under applicable tax rules.
A taxable account lacks a special account-level tax shelter, so income, distributions, and realized transactions may create current tax consequences.
A taxable event is a transaction or occurrence that can create tax recognition, reporting, withholding, or liability under applicable rules.
Taxable income is the U.S. federal income-tax base remaining after income, adjustments, and permitted deductions are calculated under current rules.
Taxable interest is interest included in income unless a specific exclusion applies, including many bank, CD, corporate-bond, and Treasury payments.
A taxable year is the accounting period used to measure and report income, deductions, credits, and tax liability.
Thin capitalization uses relatively high debt and low equity funding, potentially limiting interest deductions under jurisdiction-specific tax rules.
A transfer of wealth moves assets during life or at death and requires review of ownership, valuation, liabilities, liquidity, basis, and tax rules.
Transfer pricing sets the terms of controlled transactions between related parties using arm's-length analysis, functional evidence, and reliable financial data.
A Treasury Decision (T.D.) is an official regulation or ruling issued by the U.S.
Tax concepts for trusts, estates, charitable structures, generation-skipping transfers, beneficiary income, and wealth transfers.
A venture capital trust is an HMRC-approved investment company whose shares trade on a regulated market and whose portfolio finances qualifying smaller companies.
The U.S. wash-sale rule disallows a current loss on stock or securities when substantially identical property is acquired within the prescribed period.
Withholding tax is deducted from a payment and remitted by the payer; its rate, documentation, creditability, and final-tax treatment determine cash received.