A method of depreciation where a taxpayer takes larger deductions in the early years of an asset'suseful life, rather than spreading the deductions out evenly throughout the years. The most common example of accelerated depreciation is the modified accelerated cost recovery system (MACRS).
The books, records, journals, ledgers, documents, and effects used in preparing a tax return. These items include, but are not limited to, bank statements, brokerage statements, mutual fund statements, sales slips, invoices, receipts, canceled checks, proofs of payment, and insurance records.
An accredited investor is any of the following: (1) A bank (2) An insurance company (3) An employee benefit plan (4) an entity with assets that exceed five million (5) A natural person whose net worth exceeds one million excluding their residence (5) a natural person whose income exceeded $200,000 ($300,000 if married) for the past two years and has no reason to expect it to stop. See 17 C.F.R. §230.501
An accounting method whereby gross income and expenses are accounted for when earned, rather than when cash is paid or received. This method allows taxpayers to record economic events, instead of the physical transfer of money.
The process of deducting a portion of a capital asset over its useful life. The amount deducted is reduced from gross income allowing a taxpayer to pay less tax.
Arbitrage is where a traderprofits from the price differential in two different markets by purchasing an asset in one market while selling it in another. If the two assets are different, then one of the assets must entitle the taxpayer to acquire the identical asset.
An option assignment occurs when a notice is sent to an option writer informing them that the purchaser has exercised their option and the seller must now fulfill their obligation.
Tax rules that effectively impose ownership of property to one party even though the property is owned by another. These rules are sometimes referred to as constructive ownership rules.