Tax Terms Glossary | Gain Power With Knowledge

Debenture: An interest bearing certificate or instrument that is unsecured by collateral.
Debt: An amount of property owing.
Debt Instrument: A document that evidences a debt, such as a bond, or debenture.
Debtor: A person who is a borrower, or owes money to a creditor.
Decedent: A person who is no longer living.
Deduction: An item that reduces taxable income.
Deep in the Money Call: A deep in the money call option is where the strike price of the option is well below the current price of the underlying security.
Deep in the Money Put: A deep in the money put option is where the strike price of the option is well above the current price of the underlying security.
Default: The failure of a debtor to pay interest and principal as it becomes due.
Default Risk: The risk that a borrower, or counter party on a derivative security, will default.
Deferred Compensation: A payment, or payments, made to an employee to compensate them for services rendered after income was earned.
Deficiency: The excess of a correct tax liability over the amount that has been credited to the taxpayer.
Deficiency Procedures: Procedures that the IRS must generally follow before they can assess a tax, or an addition to tax (penalty). Deficiency procedures require that the IRS issue the taxpayer a notice of deficiency (ticket to tax court) and allow the taxpayer to petition the tax court for a re-determination before the IRS can assess the tax.
Defined Benefits Pension Plan: A pension plan where an employer promises that upon retirement an employee will receive monthly payments based upon a formula of earnings history, tenure of service, and age.
Defined Contributions Pension Plan: A pension plan where the contributions of both the employer and employee are invested to provide the employee with a pool of funds from which to retire. There is no guarantee of future benefits, as that depends on investment returns.
Delinquency: Tax that is due, but not yet paid.
De minimis: An amount that is so small it is not material.
Dependent: A person who relies on another for support, usually financial support.
Depreciation: A term used to spread the cost of an asset over the term of years, or its useful life.
Derivative: A financial instrument that is intangible and based upon another asset.
Discount: The amount by which a debt instrument is trading below its face value.
Dispose: To get rid of.
Disposition: To transfer property to another, or to discard it.
Distribution: The delivery of things to its intended recipients.
Dividend: A payment made from a corporation to its shareholders.
Double Taxation: The imposition of two or more taxes, on the same gross income.