• Glossary

    If this doesn't clear things up, just come in. We'll explain everything you need to know.

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


  • Improvement -

    Property maintenance or enhancement that adds to the value of the property, lengthens its useful life, or changes it so it can be used in a new way.

    Incentive Stock Option (ISO) -

    An option to purchase stock that is granted to an employee for any reason connected with their employment by a corporation. This option is granted by the employer corporation or its parent or subsidiary corporation and applies to an employee's purchase of stock of any such corporation.

    Incidental Costs -

    Expenses or costs that are not material expenses incurred while on business or that do not add substantial value to a gift.

    Income in Respect of the Decedent -

    Income received after the decedent's death that cannot be included in the decedent's income tax return but that would have been attributable to the decedent had they lived.

    Indefinite Assignment -

    An assignment that is realistically expected to last for more than one year or that does in fact last more than one year.

    Independent Contractor -

    A non-employee who performs services for a person. The person for which they perform services has the right to control or direct only the result of the work and not the means and methods of accomplishing the result.

    Individual Retirement Arrangement (IRA) -

    A personal savings plan that offers an individual tax advantages to set aside money for retirement.

    Individual Taxpayer Identification Number (ITIN) -

    A nine-digit number issued by the IRS to resident and nonresident aliens who are not eligible to get a Social Security number. An ITIN is issued exclusively for tax reporting or filing purposes.

    Injured Spouse -

    A taxpayer who did not know and had no way of reasonably knowing that there was an understatement of tax due to erroneous items of their spouse (or former spouse) on their joint return.

    Insolvent -

    The condition that occurs when a taxpayer's debts are more than the fair market value of their assets.

    Installment Agreement -

    An agreement with the IRS to pay tax debt in smaller, more manageable amounts (installments).

    Installment Sale -

    An activity that is carried on for personal pleasure or recreation and is not entered into with the intention of making a profit.

    Instrument -

    A legal document.

    Intangible Property -

    Property that has value but cannot be seen or touched, such as goodwill, patents, copyrights, and computer software.

    Intangibles Tax -

    A tax based on the value of certain intangible personal property, such as portfolio income (income from stocks, bonds, mutual fund shares, etc.).

    Interest -

    The fee received for lending money, usually calculated as a percentage rate for a certain time period. Interest can be earned through depositing money in savings programs, buying certificates of deposits (CDs) or bonds, or lending money to people.

    Inventory -

    Property or merchandise the individual produces or purchases to sell in the natural course of their trade or business.

    Investment Interest -

    The interest paid for money borrowed to buy property held for investment.

    Investment Property -

    Generally, property that produces interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business.

    Involuntary Conversion -

    The forced (not voluntary) disposition of property due to theft, casualty, or condemnation, and the receipt of other property or money in payment of this property, such as insurance or a condemnation award. An involuntary conversion is also called an involuntary exchange.

    IRA Basis -

    For a traditional IRA, the amount of nondeductible traditional IRA contributions in the person's IRA. For a Roth IRA, the amount of contributions and conversions to the Roth IRA.