Economic accrual of interest refers to the cost of an indebtedness for a given period, calculated by multiplying the period’s interest rate by the unpaid loan balance, including prior accrued interest.
A qualified residence refers to a principal residence and one other residence that a taxpayer or spouse owns. Interest paid on a qualified residence may be deductible as an itemized deduction.
Qualified Residence Interest refers to the interest paid on a home mortgage that may be deductible as an itemized deduction on federal income tax returns. It includes interest on acquisition indebtedness and home equity loans.
Thin capitalization refers to an arrangement where a company is financed through a high level of debt compared to equity, typically involving intercompany loans within a multinational entity. This is often structured to gain tax advantages by exploiting interest payment deductions.
