taxable distribution. A generation-skipping transfer from a trust to the beneficiary (i.e., the skip person) that is neither a direct skip nor a taxable termination. See GENERATION-SKIPPING TRANSFER; generation-skipping transfer tax under TAX; generation-skipping trust under TRUST; SKIP PERSON. [Cases: Internal Revenue 4224.]
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taxable termination. A taxable event that occurs when (1) an interest in a generation-skipping trust property terminates (as on the death of a skip person’s parent who possessed the interest), (2) no interest in the trust is held by a nonskip person, and (3) a distribution may be made to a skip person. • Before
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A gift or estate tax imposed on a generation-skipping transfer or a generation-skipping trust. — Sometimes shortened to generation-skipping tax; transfer tax. IRC (26 USCA) §§ 2601–2663. See DIRECT SKIP; GENERATION-SKIPPING TRANSFER; generation-skipping trust under TRUST; TAXABLE DISTRIBUTION. [Cases: Internal Revenue 4220–4228. C.J.S. Internal Revenue §§ 576–578.]
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ratable (ray-t[schwa]-b[schwa]l), adj. 1. Proportionate (ratable distribution). 2. Capable of being estimated, appraised, or apportioned ( because hundreds of angry fans ran onto the field at the same time, blame for the goalpost’s destruction is not ratable). 3. Taxable (the government assessed the widow’s ratable estate). See PRO RATA.
earnings and profits. Corporations. In corporate taxation, the measure of a corporation’s economic capacity to make a shareholder distribution that is not a return of capital. • The distribution will be dividend income to the shareholders to the extent of the corporation’s current and accumulated earnings and profits. Cf. accumulated-earnings tax under TAX; accumulated taxable
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A taxable payment to a mutual-fund shareholder. • The payment is the shareholder’s proportional share of the net capital gains realized by securities sales from the mutual fund’s portfolio. — Also termed capital-gain distribution.
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dependent, n. 1. One who relies on another for support; one not able to exist or sustain oneself without the power or aid of someone else. lawful dependent. 1. One who receives an allowance or benefits from the public, such as social security. [Cases: Social Security and Public Welfare 4.10. C.J.S. Social Security and Public