Industry Related Definitions
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T
Tangible Personal Property
Property,
other than real property, that has a physical existence and an
intrinsic value. Examples are livestock, machinery, equipment, and
vehicles.
Taxable Income
Adjusted
gross income less itemized deductions or the standard deduction, less
allowable personal and dependent exemption amounts.
Taxable U.S. Domestic Corporation
An
organization incorporated in and doing business with the intent to
make a profit in the United States. Examples are H&R Block,
General Motors, and IBM.
Taxable Year
The
calendar year or fiscal year for which the taxable income is computed.
Tax Benefit Rule
A rule
that limits the recognition of income from the recovery of an expense
or loss properly deducted in a prior tax year to the amount of the
deduction that reduced taxable income.
Tax Bracket
The rate at which income at a particular level is taxed.
Tax Court
The U.S.
Tax Court is one of three trial courts of original jurisdiction that
decide litigation involving federal income, death, and gift taxes.
Tax Credit for the Elderly or the Disabled
Eligible
taxpayers 65 years old and older, and those under 65 retired on a
permanent and total disability, may claim the credit. The amount of
the credit, if any, is computed on Schedule R, Form 1040, or Schedule
3, Form 1040A.
Tax-Exempt Income
Income
that by law is not subject to income tax.
Tax-Free Exchanges
Transfers
of property specifically exempt from federal income tax consequences
in the current year. Examples are a transfer of property to a
controlled corporation and a like-kind exchange.
Tax Home
The
business location, post, or station of the taxpayer. If an employee is
temporarily reassigned to a new post for a period of one year or less,
the taxpayer's tax home is his personal residence and the travel
expenses are deductible.
Tax Liability
The amount
of total tax due the IRS after any credits and before taking into
account any advance payments (withholding, estimated payments, etc.)
made by the taxpayer.
Taxpayer's Child
Includes
the taxpayer's natural child, stepchild, or a child placed for legal
adoption regardless of when the child came to live with the taxpayer;
also, any other child whom the taxpayer cared for as his own child for
the entire year unless the child's natural or adoptive parents
provided over half of the child's support.
Tax Preference Items
Tax items
that may result in the imposition of the alternative minimum tax.
Tax Rate Schedules
Tax rate
schedules are used by certain taxpayers. Separate rate schedules are
provided for married individuals filing jointly or qualifying
widow(er)s, unmarried heads of household, single taxpayers, and
married individuals filing separate returns.
Tax Table
The Tax
Table is provided for taxpayers with taxable incomes of less than
$100,000. Separate columns are provided for single taxpayers, married
taxpayers filing jointly or qualifying widow(er)s, heads of household,
and married taxpayers filing separately.
Temporary Assignment
A work
assignment away from the taxpayer's tax home, the termination of which
can be foreseen at the time the job begins, within a reasonably short
period. Deduction of temporary assignment expenses is allowed to
provide relief to those who have extra expenses because of their work.
To have any deductible expenses, the taxpayer must own or be renting
or buying lodging in the general area of the regular place of
employment and intend to return to that lodging at the end of the
temporary assignment.
Tenancy by the Entirety
A tenancy
in which parties jointly own property. After the death of one, the
survivor takes the whole estate. Tenancy by the entirety can be
terminated during their lifetime only by joint action of the parties.
Tenancy in Common
Two or
more individuals jointly owning property. Each owns an undivided share
of the whole. The shares remain separate even if one party dies.
Threat of Condemnation
When a
property owner is informed, either orally or in writing, by a
representative of a governmental body or by a public official
authorized to acquire property for public use, that a decision has
been made to acquire his property, and it is reasonable to believe
that the property will be taken, a threat of condemnation exists.
Tip Income
Gratuities received by the taxpayer for services rendered. Tips of $20
or more from any one job during a calendar month must be reported to
the taxpayer's employer.
Trade Date
Date on
which a capital asset is actually bought or sold.
Trade-In Allowance
The amount
by which the seller reduces the sale price of a property in return for
the property of the buyer. This does not affect the buyer's basis in
the property purchased.
Trade or Business Expenses
Deductions
from gross income that are attributable to a taxpayer's business or
profession.
Traditional IRA
An
individual retirement arrangement, contributions to which may or may
not be deductible depending on the taxpayer's AGI and whether he or
she is covered under an employer-sponsored retirement plan. Earnings
within a traditional IRA grow tax-deferred. Distributions from a
traditional IRA are taxable except to the extent they represent
nondeductible contributions.
Transfer Tax
A tax
imposed when real estate is sold or transferred from one person to
another.
Transportation Expenses
Transportation
expenses for an employee or self-employed taxpayer include only the
cost of transportation (taxi fares, auto expenses, etc.) incurred in
the course of business or employment when the taxpayer is not away
from home in a travel status.
Travel Expenses
Travel expenses include meals and lodging and transportation expenses
while away from home in the pursuit of a trade or business (including
that of an employee).
Trial
balance
A
special listing of all the account balances in a ledger, the purpose
of which is to see if the dollar value of the accounts with debit
balances is equal to the dollar value of the accounts with credit
balances.
Trust
A tax
entity created by a trust agreement. This entity distributes all or
part of its income to beneficiaries as instructed by the trust
agreement. This entity is required to pay taxes on undistributed
income.
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