• Glossary

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    Click the first letter of the term you're searching for to get an easy-to-understand explanation.

  • Abandonment -

    The act of voluntarily and permanently giving up possession and use of property with the intention of ending ownership without transferring ownership to another person.

    Abode -

    The taxpayer's home, habitation, residence, domicile, or place of dwelling.

    Academic Period -

    A semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution.

    Accelerated Cost Recovery System (ACRS) -

    The name given to tax rules relating to recovering, through depreciation deductions, the cost of property used in a trade or business to produce income.ACRS applies to property first used before 1987.

    Accelerated Death Benefits -

    Any amounts paid under a life insurance contract, prior to death, for an individual who is terminally or chronically ill.

    Accountable Plan -

    A reimbursement or allowance arrangement that requires an employee to account to their employer for their business expenses within a reasonable time.

    Accounting Method -

    The way a taxpayer accounts for income and expenses.

    Active Conduct of Trade or Business -

    Generally, to participate meaningfully in the management or operations of a trade or business.

    Active Participation -

    Participation in a rental real estate activity in which the taxpayer owns at least 10% of the rental property and makes significant and bona fide management decisions, such as approving new tenants, deciding on rental terms, and approving expenditures.