Tax Terms Glossary | Gain Power With Knowledge

Backwardation: This is where distant future contract prices are less expensive than spot prices, or near term prices.
Balance Sheet: A statement of the financial position of an entity on a particular date in time. The statement will show owner's equity, assets, and liabilities.
Balloon Payment: A larger than usual payment that is typically made when a debt is redeemed.
Basis: The purchase price of an asset including commissions and other expenses.
Bank: A special entity that holds, loans, or issues currency and extends credit in exchange for interest.
Bearer Securities: Securities where the holder can pass title with delivery, as there is no registration of who owns the asset. An example is the U.S. dollar or Federal Reserve note or the Canadian dollar.
Beneficial Owner: A person who enjoys the benefits of property ownership, even though title may be in a different person’s name.
Beneficiary: A person who receives the benefits from certain acts. A beneficiary may be a person who receives benefits from a trust or insurance policy.
Board of Equalization (BOE): California State agency that administers sales and use, property, and special taxes.
Bond: An interest bearing security where the holder is not entitled to an interest in the profits of the issuing entity.
Book Value: The value of an asset that is carried on the balance sheet of an entity, taking depreciation into account.
Boot: A cash payment made to equalize the value in a transaction, where two pieces of property are exchanged.
Borrow: The act of obtaining funds from a lender with the expectation that the funds will be returned, often with interest.
Borrower: A person who obtains funds from a lender on the condition that it is returned, usually with interest.
Business: A person or entity who is engaged in profit-motivated-activities.
Business Purpose Test: A test used to check if the purpose of a transaction was for legitimate business purposes. This is an anti-abuse test because if the test discovers that there is no legitimate business purpose for a particular transaction, the transaction could be unwound for tax purposes.