Glossary

The date an individual must be listed as the owner of shares in a company's records to be the recipient of the dividends to be paid.

A deceased individual.

The right to buy a stated number of shares of stock at a predetermined price (the strike price) before a specified date.

A method of calculating the depreciation for property that applies the same depreciation rate each year to the adjusted basis of the property.

A qualified employer retirement plan that maintains a separate account or annuity to receive voluntary employee contributions. If this plan or annuity otherwise meets the requirements of an IRA, it is subject only to IRA rules. An employee's account can be treated as a traditional IRA or a Roth IRA.

The voluntary contribution an employer deducts from an employee's pay that is not subject to income tax. Also called elective deferral or pre-tax contributions.

An account that postpones payment of interest to a future date.

An individual, other than the taxpayer or their spouse, who entitles the taxpayer to claim an exemption.

Amounts an employer pays directly to an employee or the employee's care provider for the care of the employee's qualifying dependent while the employee works, or the fair market value of care in a daycare facility provided or sponsored by the employer.

The using up of natural resources by mining, quarrying, drilling, or felling, for which a deduction allows an owner or operator to account for the reduction of a product's reserves.

An amount that can be deducted annually that allows the taxpayer to recover the cost or other basis of certain property over the time the property is used in trade or business. It is an allowance for the wear and tear, age, deterioration, or obsolescence of the property.

A person who descended from an individual. For example, an individual's great grandchild is their descendant.

The transfer of a distribution made by the administrator of the distributing plan directly from one qualified plan to another qualified plan (if permitted) or traditional IRA.

An individual who can show proof that they cannot engage in a substantial gainful activity because of their physical or mental condition. A physician must determine that their condition can be expected to result in death or to be of long-standing and indefinite duration.

The difference between the amount paid for an asset and the fair market value or stated face value of that asset.

The exchange, sale, or loss of property, whether voluntary or involuntary.

An area for which the poverty rate or other conditions cause certain tax incentives to apply.

Money or assets paid out or withdrawn.

A plan that lets an investor choose to use their dividends to buy more shares of stock in a corporation through an agent instead of receiving the dividends in cash. The investor must still report the fair market value of the dividends on their tax return.

Distributions of money, stock, or other property paid to shareholders by a corporation. Dividends may also be received through a partnership, estate, trust, or association that is taxed as a corporation.

A divorce or separate maintenance decree or a written instrument that happens as a result of that decree, a written separation agreement, or a decree or any type of court order requiring a spouse to make payments for the support or maintenance of the other spouse. This includes a temporary decree, an interlocutory (not final) decree, and a decree of alimony pendente lite (while awaiting action on the final decree or agreement).

The taxpayer's permanent legal home where they intend to live for an indefinite or unlimited period and to which they intend to return when absent.

A person who receives a gift.

A person who gives a gift.

An individual who is a resident alien for part of the tax year and a nonresident alien for part of the year.

The requirement that a paid preparer must show a serious and earnest effort to obtain accurate and complete information.