Bed and Breakfasting refers to a tax strategy where a shareholder sells a holding and buys it back the next day to realize a loss for tax purposes. However, legislative changes have rendered this practice obsolete for shares due to stricter time requirements.
An itemized deduction allowed for donations made to qualifying charities. Several limitations apply to this deduction, especially for noncash property donations.
Gift splitting is a tax strategy that allows a married couple to combine their individual annual gift tax exclusions and unified estate and gift tax credits, enabling them to give a larger gift to a recipient without incurring gift tax liability.
Income shifting is a tax strategy that involves transferring gross income from one taxpayer to another, typically to a taxpayer in a lower tax bracket, in order to reduce the overall tax liability of a group or family.
Loss carryback is a tax strategy that allows businesses to apply a net operating loss (NOL) from a current year to offset income from previous years, typically up to three years. This can result in a tax refund for taxes paid in those previous years.
The process of distributing a tax charge among different sources of income to ensure appropriate tax liability allocation.
Ten-year averaging is a method used to calculate income tax on a lump-sum distribution from a qualified benefit plan. This method was designed to reduce the tax liability of the beneficiary on large, one-time distributions. The ten-year averaging rule applies to individuals who were participants in a qualified benefit plan, were at least 50 years of age before January 1, 1986, and had been participants in the plan for at least five years before the year they receive the distribution.
