carryover. An income-tax deduction (esp. for a net operating loss) that cannot be taken entirely in a given period but may be taken in a later period (usu. the next five years). — Also termed loss carryover; tax-loss carryover; carryforward; loss carryforward; tax-loss carryforward. Cf. CARRYBACK. [Cases: Internal Revenue 3438, 3439; Taxation 1043. C.J.S. Internal […]
all-events test. Tax. A requirement that all events fixing an accrual-method taxpayer’s right to receive income or incur expense must occur before the taxpayer can report an item of income or expense. [Cases: Internal Revenue 3373.]
An amount allowed as a deduction from an individual taxpayer’s adjusted gross income. [Cases: Internal Revenue 3295; Taxation 1031.1, 1048. C.J.S. Taxation §§ 1736–1739.]
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Tax. Revenue that represents the repayment of cost or capital and thus is not taxable as income. — Also termed return of capital.
recognition, n. 1. Confirmation that an act done by another person was authorized. See RATIFICATION. [Cases: Principal and Agent 170(2).C.J.S. Agency § 88.] 2. The formal admission that a person, entity, or thing has a particular status; esp. a nation’s act in formally acknowledging the existence of another nation or national government. 3. Parliamentary law.
Tax. Interest paid on debt that is secured by one’s home and that was incurred to purchase, build, improve, or refinance the home. • This type of interest is deductible from adjusted gross income. [Cases: Internal Revenue 3282. C.J.S. Internal Revenue § 286.]
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deficiency, n. 1. A lack, shortage, or insufficiency. 2. A shortfall in paying taxes; the amount by which the tax properly due exceeds the sum of the amount of tax shown on a taxpayer’s return. — Also termed tax deficiency; income-tax deficiency; deficiency in tax. 3. The amount still owed when the property secured by
exemption. 1. Freedom from a duty, liability, or other requirement; an exception. See IMMUNITY; EXCEPTION(2). 2. A privilege given to a judgment debtor by law, allowing the debtor to retain certain property without liability. [Cases: Exemptions 1; Homestead 1.] 3. Tax. An amount allowed as a deduction from adjusted gross income, used to determine taxable
A charitable organization that is funded by a single source, derives its income from investments rather than contributions, and makes grants to other charitable organizations. • A private foundation is generally exempt from taxation. IRC (26 USCA) § 509. — Also termed private nonoperating foundation.
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A method of reporting profit or loss on certain long-term contracts by recognizing gross income and expenses in the tax year that the contract is completed. [Cases: Internal Revenue 3101; Taxation 1078. C.J.S. Internal Revenue §§ 21, 24–26; Taxation § 1759.]
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