Tax Terms Glossary | Gain Power With Knowledge

Face Value: The value at which a debt instrument will mature.
Fair Market Value (FMV): The price at which willing buyers and sellers would be ready, willing, and able to sell or buy an asset, good, or service.
Fiduciary: A guardian, trustee, executor, receiver, or any other person holding an asset in trust for another person called a beneficiary. See 18 U.S.C. §7701(a)(6)
Field Audit: An examination of the taxpayer's books and records at the taxpayer’s place of business.
Financial Instrument: A physical or electronic document that holds monetary value. Examples include currencies, stocks, bonds, debentures, and derivatives.
First in First Out: FIFO: Older items, those that were acquired first, are assumed to be sold first.
Fiscal Policy: Government policy that attempts to change the behavior of its subjects through spending programs and tax laws.
Fiscal Year (Tax Year): An accounting period of any twelve consecutive months.
Foreign Sourced Income: Gross income that is earned outside the taxpayer's country of residence.
Foreign Tax Credit: A credit provided to a taxpayer for taxes paid to a foreign jurisdiction.
Form (Tax): A special form designed for taxpayers to report their financial dealings for the year. An example would be Form 1040.
Forward Contract: A contract executed over the counter where the buyer receives the obligation to buy and the seller the obligation to sell an underlying instrument at a predetermined price in the future. There are no mechanisms for early termination of a forward contract nor are there any mark to market rules.
Futures Contract: A contract executed on an organized exchange where the buyer receives the obligation to buy and seller the obligation to sell an underlying instrument at a predetermined price in the future.
Frivolous Position: A position advanced by a taxpayer that they know is invalid and therefore presented for improper purposes.
Frivolous Return: A frivolous return is a tax return designed to fail in providing a taxing authority with enough information to assess the correct amount of tax.