Glossary

A helpful and appropriate expense for a field of trade, business, or profession; it does not have to be indispensable to be considered necessary.

The amount by which the net long-term capital gain for the year exceeds the net short-term capital loss.

Generally, the amount by which allowable deductions exceed gross income.

The year in which an NOL occurred.

The increase in the value of securities while held in trust.

An individual who receives income in their name that actually belongs to someone else.

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.

The parent who has custody of a child for the shorter part of the year or who does not have custody at all.

Income from earnings or wages, active business participation, dividends, interest, or capital gains.

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A plan that does not meet the IRS requirements for qualified retirement plans.

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.

A debt for which the debtor is not personally liable.

Financing for which the taxpayer is not personally liable.

A credit that cannot be more than the tax liability on the taxpayer's tax return.

Most real property (real estate) other than residential rental property.

An exchange in which any gain is not taxed and any loss cannot be deducted.

Generally, an activity that has not produced a profit in at least three of the last five tax years, including the current year.