What Is “Salvage value”?
06/01/2026
What Is Salvage Value? Salvage value is the estimated dollar amount that an asset is expected to be worth at the end of its useful life. It represents the “residual” or “scrap” value you expect to receive if you were to sell or trade in the item after it can no longer be used for
What Is “Sale of Business Property”?
06/01/2026
What Is the Sale of Business Property? The sale of business property refers to the disposal of assets used in your trade or profession, such as equipment, vehicles, or real estate, in exchange for money or other property. When you sell these items, the IRS requires you to calculate whether you made a profit or
What Is “Restricted Stock”?
06/01/2026
What Is Restricted Stock? Restricted stock is a form of employee compensation where a company grants shares to an individual, but those shares are subject to “strings attached,” such as a vesting schedule. Unlike stock options, you actually own the shares the moment they are granted, but you cannot sell or transfer them until the
What Is “Restricted Stock Unit”?
06/01/2026
What Is a Restricted Stock Unit (RSU)? A Restricted Stock Unit (RSU) is a form of equity compensation where an employer promises to give an employee shares of company stock at a future date. Unlike stock options, you do not have to buy these shares; they are granted to you once you meet specific conditions,
What Is “Residential rental property”?
06/01/2026
Residential rental property is a type of real estate—like a house, condo, or apartment building—that you own and rent out to tenants for use as a home. For the IRS to classify a building as “residential,” at least 80% of the total income generated by that property must come from dwelling units (places where people
What Is “Replacement Property”?
06/01/2026
What Is Replacement Property? Replacement property is the “new” asset or real estate acquired in a Section 1031 exchange to replace the one you sold. By acquiring this property, you can defer paying capital gains taxes on the profit from your sale, allowing your investment to keep growing. 1. Meaning of “Replacement Property” In plain
What Is “Rental property”?
06/01/2026
A rental property is any real estate—such as a house, apartment, condominium, or commercial building—that you own and allow others to use in exchange for payment. For federal tax purposes, the IRS generally views rental activities as a business, meaning you must report the rent you receive as income while also having the ability to
What Is “Relinquished Property”?
06/01/2026
What Is Relinquished Property? Relinquished property is the “old” asset or real estate that you sell as part of a Section 1031 like-kind exchange. It is the property you are giving up or moving out of so that you can reinvest the proceeds into a new, similar property while deferring capital gains taxes. 1. Meaning
What Is a “REIT Dividend”?
06/01/2026
What Is a REIT Dividend? A REIT dividend is a distribution of profits paid by a Real Estate Investment Trust (REIT) to its shareholders. Because REITs are required by law to distribute at least 90% of their taxable income to investors, they often offer higher yields than typical stocks, though they are taxed differently than
What Is “Recovery Period”?
06/01/2026
What Is a Recovery Period? A recovery period is the specific number of years over which the IRS allows you to depreciate (or “write off”) the cost of a business asset. It represents the standardized timeframe the government expects an item to remain useful before it is considered fully worn out for tax purposes. 1.