A modification of the former Hope Scholarship Tax Credit, AOTC provides up to $2,500 a year for eligible postsecondary education expenses including course materials, with gross income limitations and up to 40% of the credit being refundable.
A Charitable Remainder Trust is an irrevocable trust that pays income to one or more individuals until the grantor's death or for a specified number of years, after which the remaining assets pass to a designated charity.
A charitable trust is a type of trust that is established to provide financial support to one or more charitable organizations, aimed at fulfilling philanthropic goals and benefiting the public.
A Coverdell Education Savings Account (ESA) is a tax-advantaged investment account designed to encourage savings for future education expenses. It can be established for a beneficiary under the age of 18, and the savings can be used for qualified education expenses from elementary through higher education.
Equipment leasing involves acquiring tangible assets such as computers, railroad cars, and airplanes, and then leasing them to businesses in exchange for lease payments and potential tax benefits like depreciation deductions.
A Family Limited Partnership (FLP) is a type of limited partnership where the majority of interests are held by members of the same family. It can provide tax benefits, such as reducing gift and estate taxes, but has limitations regarding ownership and transferability.
An irrevocable trust is a type of trust that cannot be altered, amended, or terminated without the consent of the beneficiary or beneficiaries. It is typically set up to provide asset protection and tax benefits.
A filing status option for taxpayers who are married to each other and agree to report their combined income and deductions. For a given level of income, filing jointly typically results in a lower tax than filing separately. *However, see Marriage Penalty*.
A Master Limited Partnership (MLP) is a type of business organization that combines the tax benefits of a partnership with the liquidity of publicly traded securities.
MACRS is a depreciation system in the USA designed to encourage capital investment by businesses. It enables a quicker recovery of an asset's cost by allowing greater depreciation deductions in the earlier years of an asset's life.
Formerly referred to as the primary residence, a principal residence is the main home where an individual lives and spends the majority of their time. Certain tax benefits and legal protections can be tied to the designation of a property as a principal residence.
A 'qualified charity' or 'qualified charitable organization' is a nonprofit organization recognized by the IRS as eligible to receive tax-deductible contributions.
An agreement in the USA that allows employees to purchase company stock at a future date at a specified price, often lower than the market price, and meeting the IRS's requirements.
The Recapture Rule requires the repayment of tax benefits like depreciation and investment tax credits claimed earlier if specific conditions are not met in subsequent years.
Ordinary deduction treatment for certain individuals and partnerships on the sales of stock or in cases of bankruptcy, allowing for ordinary loss treatment up to specific limits.
A financial loss incurred by an organization that can be carried forward to subsequent periods to reduce the tax payable in those periods.
Tax loss carryback and carryover are tax benefits that allow taxpayers to use losses from one year to offset taxable income in other years, effectively reducing tax liability.
A Tuition Tax Credit is a non-refundable credit offered by the federal government that can be used to offset the cost of college education by reducing the amount of tax owed.
