Industry Related Definitions
Back to the Index
G
GAAP
Generally
accepted accounting principles. (See
link)
Gain
The excess of the amount realized from a sale or exchange over the
adjusted basis of the property sold or exchanged.
General Depreciation System
The most
commonly used MACRS system. Personal property is depreciated using the
declining-balance method (double or 150 percent, depending on the
recovery class) switching to straight line when that method results in
the larger deduction. Residential rental property is depreciated using
the straight-line method over 27.5 years, and nonresidential real
property is depreciated using the straight-line method over 39 years
(31.5 years for property placed in service before May 13, 1993).
General
ledger
A
book or file containing all the accounts of the business other than
those in the subsidiary ledgers. The general ledger accounts represent
the complete financial position of the company.
General Rule
Used to
determine the taxable portion of a pension or annuity.
General Straight-Line Depreciation System
A MACRS
system of depreciation using the straight-line method over the normal
MACRS recovery period for the asset.
Gift
A transfer
of property from one person or entity to another without consideration
or compensation. For income tax purposes, the words "gift"
and "contribution" usually have separate meanings, the
latter word being used in connection with contributions to charitable,
religious, etc., organizations, whereas the word "gift"
refers to transfers of money or property to private individuals, needy
persons, friends, relatives, etc. The recipient of a gift is not
required to include it in his gross income, and the maker of the gift
is not entitled to deduct it (except for business gifts to customers
of $25 or less per donee per year).
Gift Tax
A
graduated federal tax paid by donors on gifts exceeding $10,000 per
year per donee.
Golden Parachute
An
agreement entered into by a corporation with its top executives to
make substantial payments to the executives in the event of a change
in corporate control. Such payments are treated as compensation.
Goodwill
The
ability of a business to generate income in excess of a normal rate on
assets due to superior managerial skills, market position, new product
technology, etc. In the purchase of a business, goodwill represents
the difference between the purchase price and the value of the net
assets. Goodwill acquired after August 10, 1993, must be amortized
over a 15-year period and is subject to recapture when the business is
sold. Amortization is computed on Form 4562.
Government Bonds Issued at a Discount
Certain
U.S. Government bonds (Series E and EE) are issued at a discount and
do not pay interest during the life of the bond. Instead, the bonds
are redeemable at increasing fixed amounts. Thus, the difference
between the purchase price and the amount received upon redemption
represents interest income to the holder. A cash-basis taxpayer may
defer recognition of taxable income until such bonds are redeemed or
until the year of final maturity, whichever is earlier. Alternatively,
the taxpayer may elect to include the annual increase in the value of
the bond in gross income on an annual basis.
Gross Income
Total
worldwide income received in the form of money, property, or services
that is subject to tax unless specifically exempt or excluded by law.
Gross Rents
Total
income from rents before expenses or the depreciation or cost recovery
deduction.
Group Term Life Insurance
Life
insurance coverage purchased by an employer for a group of employees.
Such insurance is renewable on a year-to-year basis and does not
accumulate in value; that is, no cash surrender value is built up. The
premiums paid by the employer on such insurance are usually not taxed
to an employee unless coverage exceeds $50,000.
Guaranteed Return
A specific
amount to be paid by an annuity. This may be a certain payment for a
given number of years or a given amount to be paid regardless of
death.
Go
back to the Definition Index page
Also, check out our
certification explanation page here!
Would you like us to
add a word or phrase? Email us at
glossary@bookkeeperlist.com
