Duhaime's Law Dictionary

Duhaime's Tax Law Dictionary

Tax Law does not rank high on the "favorite subject list" not just of the general population but also among lawyers, lawyers being sometimes negatively considered of in terms of their accounting abilities. But behind the far greater body of accounting work that buttresses the business of taxation is a not inconsiderable body of law unique to the field of taxation, an understanding of which must necessarily begin with Tax Law legal terms. That is the raison d'être of Duhaime's Tax Law Dictionary.

Arm's Length
A transaction or relationship where there is an absence of control the one over the other.
Bare Trust
A trust that is or has become passive for the trustee because all the duties the settlor may have imposed upon the trustee have been performed or any conditions or terms have come to fruition.
Capital Asset
A designation of an asset so that profit or loss can be tracked for tax purposes; generally, all and any asset belonging to a tax-payer except those specifically excluded.
Capital Expenditure
A once and for all expense to provide an enduring benefit to a capital asset.
Capital Gain
The eventual, net proceeds of sale of an asset, subtracting the original purchase price from the sale price.
Capital Loss
The amount of monies lost when disposing of an asset, the difference between the higher purchase cost and the subsequent but lower amount received when the asset was sold.
Danegeld
An English tax initially intended to pay for national defence against the Danes.
Depreciation
An accounting procedure in which the cost or other recorded value of a fixed asset less estimated residual value (if any) is distributed over its estimated useful life in a systematic and rational manner.
Economic Activity
The production, distribution, and consumption of commodities.
Employee
A person who has agreed by contract to perform specified services for another, the employer, in exchange for money.
Fair Market Value
The hypothetical most probable price that could be obtained for a property by average, informed purchasers.
Income Tax
A mandatory payment imposed on residents of a pro rated portion of their income as a contribution towards the costs of government services.
Independent Contractor
A person hired by another not as an employee but, rather, pursuant to a contract for service where the engaging party does not supervise or control the detail of the work, and where the party engaged remains self-employed.
Kiddie Tax
A tax imposed on minors in the events of income from specified high yield sources.
Klein Conspiracy
(USA) Conspiracy to defraud the United States by frustrating the functions of the Internal Revenue Agency.
Ordinarily Resident
The place where in the settled routine of an individual's life, he or she regularly, normally or customarily lives.
Personal Living Expenses
Expenses reasonably necessary to maintain health and well-being, to enjoy life's activities, and the capacity to earn money.
Personal Services Contract
A contract in which the skills or talents of a party are material.
Personal Trip
A trip which would have been made in spite of the failure or absence of the business purpose and would have been dropped in the event of failure of the private purpose, though the business errand remained undone.
Personal Use
Non-business use.
Reserve
Government-owned land set aside for the exclusive use of Aboriginal people.
School Bus
A vehicle which transports children to or from school activities for compensation.
Straight-line Depreciation
A depreciation formula which writes off the cost of an asset at a fixed percentage rate every year of an asset's useful life.
Tax
A payment to a public authority, required by statute, for a public purpose.
Tax Amnesty
An opportunity afforded to a tax payer to rectify errors or omissions in past tax years or returns.
Tax Avoidance
To avoid taxes by arranging one's affairs so as not to incur tax.
Tax Evasion
A prohibited or illegal act or omission which is designed to reduce a person’s tax liability.

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