What Is “Recapture”?
06/01/2026
What Is Recapture? Recapture is a tax procedure that allows the IRS to collect taxes on a profitable sale of an asset that had previously provided you with a tax benefit, such as depreciation. It essentially “takes back” some of the tax breaks you claimed in previous years because the asset ended up being worth
What Is “Real estate tax”?
06/01/2026
What Is Real Estate Tax? Real estate tax is a local tax levied by state, county, or municipal governments based on the value of immovable property, such as land and buildings. For many taxpayers, it is a deductible expense that can significantly reduce federal income tax liability when filing a return. 1. Meaning of “Real
What Is “Qualifying Disposition”?
06/01/2026
What Is a Qualifying Disposition? A qualifying disposition is the sale or transfer of stock acquired through an Incentive Stock Option (ISO) or an Employee Stock Purchase Plan (ESPP) after meeting specific IRS holding period requirements. By waiting long enough to sell, you “qualify” for more favorable tax treatment, allowing your profits to be taxed
What Is “Qualified Intermediary”?
06/01/2026
What Is a Qualified Intermediary? A Qualified Intermediary (QI), also known as an exchange accommodator, is a neutral third party who facilitates a Section 1031 like-kind exchange. Their primary job is to hold the proceeds from the sale of your old property and use them to purchase your new property, ensuring you never “touch” the
What Is “Qualified Dividend”?
06/01/2026
What Is a Qualified Dividend? A qualified dividend is a type of investment payout that meets specific IRS requirements to be taxed at lower long-term capital gains rates rather than higher ordinary income tax rates. These dividends essentially provide a “tax discount” to investors who hold onto their stocks for a minimum amount of time.
What Is “Property tax deduction”?
06/01/2026
What Is a Property Tax Deduction? A property tax deduction allows you to subtract the amount you paid in local and state property taxes from your federally taxable income. By claiming this deduction, you lower the portion of your income that the IRS can tax, ultimately reducing your total tax bill. 1. Meaning of “Property
What Is “Principal residence”?
06/01/2026
What Is a Principal Residence? A principal residence is the primary home where you live most of the time. Even if you own multiple properties, the IRS generally recognizes only one “main” home as your principal residence for tax purposes during any specific period. 1. Meaning of “Principal residence” In plain English, your principal residence
What Is “Primary residence”?
06/01/2026
What Is a Primary Residence? A primary residence is the main home where a taxpayer lives most of the time. While you can own multiple properties, the IRS generally recognizes only one location as your primary residence for tax purposes during any given period. 1. Meaning of “Primary residence” In plain English, your primary residence
What Is “Points”?
06/01/2026
What Are Points in Real Estate Taxes? In the context of U.S. taxes, “points” are certain charges paid to a lender to obtain a home mortgage. They are essentially a form of prepaid interest that you pay upfront at closing to secure a lower interest rate over the life of your loan. 1. Meaning of
What Is “Placed in Service”?
06/01/2026
What Is “Placed in Service”? “Placed in service” is the date an asset is ready and available for a specific use in your business or for the production of income. It is the official “start button” for your tax benefits, marking the moment you can begin claiming depreciation, Section 179 deductions, or certain tax credits.