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Tax Terms Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Lapse (Option)
When an option expires valueless.
Last in First Out (LIFO)
New items, those that were acquired last, are assumed to be sold first.
Legal owner
The legal owner is on title for property and therefore appears to have control over it, even though a beneficial owner may be entitled to the benefit of ownership.
Legal Structure
The legal structure of a business is how it is legally setup to operate. For example, a legal structure could be a single corporation that engages in business. Or it could be a partnership that owns a corporation that own assets that produce goods or services.
Legislation
A law enacted by government.
Lender
A person who provides funds to a borrower on the condition that they are returned, usually with interest.
Levy (tax)
A tax levy is where taxpayer property is brought into the legal custody of the taxing authority through seizure. A levy being an absolute legal appropriation of the property being levied upon.
Liability
The obligation to pay money or property to another.
LIBOR
London Interbank Offering Rate
Lien (tax)
A lien is a security interest or claim on the taxpayer's property that is established by statute and by itself does not transfer title or possession of the debtor's property, but allows the taxing authority to avail itself of the lien in the event of a default of payment.
Limited Liability Company (LLC)
A business entity that can enjoy the tax benefits of being a conduit and also the protections of a corporation.
Limited Partner
A partner in a partnership who is not active and has limited liability.
Listed Company
A company whose shares are listed on an organized stock exchange.
Liquidation
A company that is being liquidated is a company that is in the process of being dissolved or wound-up.
Liquidity
The ease of which an asset can be bought or sold in the market. With marketable securities, this would be where there is a small spread.
Loan
Property that is expected to be paid back to the lender with interest.
Long Position
A long position is where the holder of a security owns the property and will profit if the property appreciates in price.
Long Term Capital Gains
A long term capital gain is where an investment property has been held by a taxpayer for more than a year and when sold the amount realized was greater than the taxpayer's basis.
Long Term Equity AnticiPation Securities (LEAPS)
LEAPS are the same as options, except that options normally have an expiry date of 9 months or less, whereas LEAPS have expiry dates exceeding 9 month and can sometimes be 2 years or more.
Loss
Being deprived or being without.
Loss Sale
A loss sale is where a taxpayer sells an asset for less than his adjusted basis.