Tax Terms Glossary | Gain Power With Knowledge

Safe Harbor: Transactions falling within a safe harbor will be accepted by a taxing authority without further question.
Sale: Disposing of an asset or good in exchange for property.
Sales Tax: A tax levied on the retail sale of an item imposed by a State.
S Corporation: A corporation that has made an election under subc-hapter S of the Internal Revenue Code to be treated as a conduit entity.
Secret Tax: A tax paid by a consumer without his knowledge.
Securities: Certificates evidencing an interest in a corporation, or evidence of indebtedness by a corporation, person, or government.
Securities Dealer: Individuals or firms that engage in trading as their profession and trade for their own account.
Self Assessment: This is where a taxpayer files a tax return declaring, or assessing, their own tax liability.
Sell: The act of transferring property in exchange for different property.
Service: Doing work for a person other than yourself.
Settlement Date: The date on which a taxpayer must pay, or receive money, for a trade that they previously executed. Typically the settlement date for stocks is trade date plus 3, whereas options are trade date plus 1.
Settlor: A person who establishes a trust by funding it with property for a beneficiary.
Severance Payments: Payments made as a result of a termination of a position of office, or employment.
Sham Transaction: A transaction made with no legitimate business purpose, as it fails the business purpose test.
Shareholder: A person or entity that holds shares in a corporation.
Shareholders' Equity: Assets minus liabilities of a corporation.
Shares: A unit to account for a piece of ownership in a corporation.
Short Position: A short position is where a person borrows a security and sells it on the market and will eventually buy it back to repay the lender. A person who is in a short position profits if the price goes down; because when they purchase the security to repay the lender they collect the difference in the selling price and the purchase price.
Short Sale: A Short sale occurs when a taxpayer borrows a stock or security from a lender and sells it to a third party with the idea of buying the stock or security back later to return it to the lender.
Short Sale against the Box: A short sale against the box occurs when a taxpayer who owns property sells identical property by borrowing it instead of using his own property.
Short Tax Year: A taxpayer whose fiscal year is less than 12 months. This will occur because it's the taxpayer's first or final return.
Short Term Capital Gains: A short term capital gain is where an investment property was sold before being held for a year and the amount realized is greater than the taxpayer's basis.
Situs: The jurisdiction that a piece of property is treated as being located in for tax purposes.
Social Security Number: A number that U.S. workers receive from the Social Security Administration that must be provided to employers.
Sold: The past tense of the word sell. To have transferred property in exchange for different property.
Sole Proprietorship: A business entity where there is only one owner and he/she is liable for the business debts.
Sojourning: A place where a person intermittently stays.
Spot Price: The current price of a commodity on the market.
Spread: The difference between the bid and asking price of an asset.
Standard Deduction: In the U.S., the standard deduction is a fixed amount taxpayers are allowed to deduct from their AGI if they choose not to take the itemized deduction.
Stepped-up Basis: In the U.S., the basis of a decedent's estate is stepped-up to the value on the date of death, or 9 months later.
Stock: Generally the term means any share or certificate representing ownership in a corporation.
Stock Option: The right, but not the obligation, to buy or sell stock.
Straddle: A straddle is the simultaneously written combination of calls and puts on the same number of shares, of the same underlying security, at the same strike price, for the same time frame.
Straight Line Depreciation: A method of depreciation that allows for equal amortization over the useful life of an asset. It is calculated by subtracting the salvage value from the purchase price and then dividing the number evenly throughout the years of the asset's useful life.
Strike Price: The predetermined price at which the underlying financial instrument will be bought or sold with an options contract.
Strip Bond: A bond that has had all the coupons stripped off of it by market participants and not the issuer.
Successor Position: Any position that at any point in time was a replacement for a second position and the second position was offsetting to any realized loss.
Substantially Similar or Related Property: Property is substantially similar or related when the fair market value of the two instruments are reasonably expected to move directly or inversely with each other and the property reflects the same economic factors.
Superseding Return: A tax return that is filed subsequently to the original return and filed within the filing period (including extensions).
Supplier: A supplier is a person that provides goods or services to a business, who uses the goods or services in their development process.
Surtax: A tax levied ontop of another tax.
Swap: A financial derivative where two parties exchange payments based upon a notional principal amount.