Purchase of a security that, having no restriction other than the payment of money, is exchangeable or convertible within a reasonable time to a second security, with a simultaneous offsetting sale of the second security. — Also termed convertible arbitrage.
wash, n. 1. A situation in which two effects offset each other. • For example, if an event produces gross income and also a deduction in the same amount so that taxable income is unchanged, the event creates a wash. 2. The shallow part of a river or the arm of a sea; the sand,
hedge, vb. To use two compensating or offsetting transactions to ensure a position of breaking even; to make advance arrangements to safeguard oneself from loss on an investment, speculation, or bet, as when a buyer of commodities insures against unfavorable price changes by buying in advance at a fixed rate for later delivery. [Cases: Commodity
A tax imposed on manufacturers of imported goods to protect domestic industry by offsetting subsidies given by foreign governments to those manufacturers. [Cases: Customs Duties 21.5. C.J.S. Customs Duties §§ 135–152.]
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tax-straddle rule. A rule preventing undue deferral of tax on income or conversion of ordinary income or short-term capital gain into long-term capital gain by disallowing the premature deduction of a loss on sale or disposition of one leg of a straddle position (e.g., a promise to sell offset by a promise to buy, such
Tax. A deduction allowed in arriving at a corporation’s accumulated taxable income. • It offsets the base on which the tax is assessed by reducing the taxable base by the greater of $250,000 or the accumulated earnings retained for the reasonable needs of the corporation, reduced by the net capital gain. IRC (26 USCA) §
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straddle, n. In securities and commodities trading, a situation in which an investor holds contracts to buy and to sell the same security or commodity, thus ensuring a loss on one of the contracts. • The aim of this strategy is to defer gains and use losses to offset other taxable income. — Also termed
intus habet (in-t[schwa]s hay-b[schwa]t). [Law Latin] Hist. Has in his own hands. • The phrase appeared in reference to the presumption that the pupil’s money that is unaccounted for and held by the tutor is sufficient to offset any claim that the tutor may have against the pupil.
depreciation reserve. An account, esp. of a public utility, built up to offset the depreciation of property because of time and use, so that at the end of the property’s service, there is enough money to replace the property. [Cases: Public Utilities 127. C.J.S. Public Utilities § 28, 37.]
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