What Is “Unrecaptured Section 1250 gain”?
05/29/2026
Unrecaptured Section 1250 gain is the portion of a profit from the sale of depreciable real estate (like a rental building) that the IRS taxes at a special rate because of the tax breaks you took while you owned the property. This gain is generally taxed at a maximum rate of 25% for individual taxpayers.
What Is “Unrealized gain”?
05/29/2026
An unrealized gain is an increase in the value of an asset, such as a stock or a piece of real estate, that you still own. It is often referred to as a “paper profit” because while the asset is worth more than you paid for it, you haven’t actually sold it to “lock in”
What Is “Tip reporting”?
05/29/2026
Tip reporting is the process where employees notify their employers of the total gratuities they receive from customers. This ensures that the correct amount of Social Security, Medicare, and income taxes are withheld from the employee’s total earnings. 1. Meaning of “Tip reporting” In plain English, tip reporting is telling your boss exactly how much
What Is “Tip income”?
05/29/2026
Tip income refers to the money, gifts, or valuables given to workers by customers as a reward for providing a service. In the eyes of the IRS, these gratuities are considered fully taxable income, just like a regular hourly wage or salary. 1. Meaning of “Tip income” In plain English, a tip is any optional
What Is “Temporary Difference”?
05/29/2026
A temporary difference is a timing gap between when an item of income or expense is recorded in your financial records (books) and when it appears on your tax return. While the two numbers don’t match today, they are “temporary” because they will eventually balance out or “reverse” in the future. 1. Meaning of “Temporary
What Is “Tax lot”?
05/29/2026
A tax lot is a specific record of an investment purchase that includes the date, quantity, and price paid. When you buy shares of the same stock or mutual fund at different times and different prices, each individual purchase is considered a separate tax lot with its own unique cost basis and holding period. 1.
What Is “Tax Income”?
05/29/2026
Tax income, more formally known as taxable income, is the portion of your total earnings that the government is actually allowed to tax. It is the final “base” number used to determine your tax bracket and calculate exactly how much you owe the IRS after all allowable subtractions have been made. 1. Meaning of “Tax
What Is “Tax basis”?
05/29/2026
Tax basis is the measurement of your total investment in a piece of property for tax purposes. It is the dollar amount the IRS uses to determine your gain or loss when you eventually sell, exchange, or dispose of that asset. 1. Meaning of “Tax basis” In plain English, tax basis is your “starting point”
What Is “SUTA tax”?
05/29/2026
SUTA tax stands for the State Unemployment Tax Act. It is a payroll tax that employers must pay to their individual state government to fund unemployment insurance benefits for workers who have lost their jobs through no fault of their own. 1. Meaning of “SUTA tax” In plain English, SUTA tax is a state-level version
What Is “Stepped-up basis”?
05/29/2026
A stepped-up basis is a tax rule that resets the cost basis of an inherited asset to its fair market value on the date of the original owner’s death. This adjustment typically “steps up” the value from what the deceased person originally paid to what the asset is worth when the heir receives it. 1.