tip, n. 1. A piece of special information; esp., in securities law, advance or inside information passed from one person to another. See INSIDE INFORMATION; INSIDER TRADING. [Cases: Securities Regulation 60.28(2). C.J.S. Securities Regulation § 180.] 2. A gratuity for service given. • Tip income is taxable. IRC (26 USCA) § 61(a). [Cases: Internal Revenue […]
A tax credit intended to stimulate business investment in capital goods by allowing a percentage of the purchase price as a credit against the taxpayer’s income taxes. • The Tax Reform Act of 1986 generally repealed this credit retroactively for most property placed in service after January 1, 1986. — Abbr. ITC. [Cases: Internal Revenue
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cash-expenditure method. Tax. A technique used by the IRS to reconstruct a taxpayer’s unreported income by comparing the amount spent on goods and services during a given period with the income reported for that period. • If the expenditures exceed the reported revenue, the IRS treats the difference as taxable income. [Cases: Internal Revenue 4530.
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Accelerated Cost Recovery System. An accounting method that is used to calculate asset depreciation and that allows for the faster recovery of costs by assigning the asset a shorter useful life than was previously permitted under the Internal Revenue Code. • This system applies to property put into service from 1981 to 1986. It was
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asset-depreciation range. Tax. The IRS’s range of depreciation lifetimes allowed for assets placed in service between 1970 and 1980 and for assets depreciated under the Modified Accelerated Cost Recovery System under the Tax Reform Act of 1986. — Abbr. ADR. See ACCELERATED COST RECOVERY SYSTEM. [Cases: Internal Revenue 3476. C.J.S. Internal Revenue §§ 230, 234,
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wage, n. (usu. pl.) Payment for labor or services, usu. based on time worked or quantity produced; specif., com-pensation of an employee based on time worked or output of production. • Wages include every form of remu-neration payable for a given period to an individual for personal services, including salaries, commissions, vaca-tion pay, bonuses, and
Tax. Compensation that is not deductible as a business expense because the com-pensation is out of proportion to the services actually rendered or because it is in excess of statutorily defined limits. IRC (26 USCA) § 162. [Cases: Internal Revenue 3323. C.J.S. Internal Revenue § 162.]
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amount realized. Tax. The amount received by a taxpayer for the sale or exchange of an asset, such as cash, property, services received, or debts assumed by a buyer. Cf. GAIN(3); LOSS(2). [Cases: Internal Revenue 3194; Taxation 996. C.J.S. Internal Revenue § 113; Taxation §§ 1732–1733.]
charitable organization. Tax. A tax-exempt organization that (1) is organized and operated exclusively for religious, scientific, literary, educational, athletic, public-safety, or community-service purposes, (2) does not distribute earnings for the benefit of private individuals, and (3) does not participate in any way in political candidate campaigns, or engage in substantial lobbying. IRC (26 USCA) §
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