Glossary If this doesn't clear things up, just come in. We'll explain everything you need to know. A B C D E F G H I J K L M N O P Q R S T U V W Click the first letter of the term you're searching for to get an easy-to-understand explanation. Necessary Expense - A helpful and appropriate expense for a field of trade, business, or profession; it does not have to be indispensable to be considered necessary. Net Capital Gain - The amount by which the net long-term capital gain for the year exceeds the net short-term capital loss. Net Operating Loss (NOL) - Generally, the amount by which allowable deductions exceed gross income. Net Operating Loss (NOL) Year - The year in which an NOL occurred. Net Unrealized Appreciation (NUA) - The increase in the value of securities while held in trust. Nominee - An individual who receives income in their name that actually belongs to someone else. Nonaccountable Plan - A payment or distribution from a retirement plan that does not recur on a regular basis. A reimbursement or allowance arrangement under which an employer reimburses an employee or provides the employee an expense allowance regardless of whether the employee meets any of the requirements of an accountable plan. Noncustodial Parent - The parent who has custody of a child for the shorter part of the year or who does not have custody at all. Nonpassive Income - Income from earnings or wages, active business participation, dividends, interest, or capital gains. Nonperiodic Payment or Distribution - Nonqualified Plan - A plan that does not meet the IRS requirements for qualified retirement plans. Nonrecaptured Section 1231 Losses - The net section 1231 losses for the previous five years that have not been applied against a net section 1231 gain by treating the gain as ordinary income. Nonrecourse Debt - A debt for which the debtor is not personally liable. Nonrecourse Financing - Financing for which the taxpayer is not personally liable. Nonrefundable Credit - A credit that cannot be more than the tax liability on the taxpayer's tax return. Nonresidential Real Property - Most real property (real estate) other than residential rental property. Nontaxable Exchange - An exchange in which any gain is not taxed and any loss cannot be deducted. Not-for-Profit Activity - Generally, an activity that has not produced a profit in at least three of the last five tax years, including the current year.