Tax Glossary

What a willing buyer would pay to a willing seller when neither is under any compulsion to buy or sell.

A person or corporation such as a trustee, executor, or guardian who manages property for another person.

A deduction of the cost of business equipment in the year placed in service.

A 12-month period ending on the last day of any month other than December. Partnerships, S corporations, and personal service corporations are limited in their choice of fiscal years and face special restrictions.

A salary reduction plan that allows employees to pay for enhanced medical coverage or dependent care expenses on a tax-free basis.

In 2007, up to $85,700 of foreign earned income is exempt from tax if a foreign residence or physical presence test is met.

A credit for income taxes paid to a foreign country or U.S. possession. 401(k) plan. A deferred pay plan, authorized by Section 401(k) of the Internal Revenue Code, under which a percentage of an employee’s salary is withheld and placed in a savings account or the company’s profit-sharing plan. Income accumulates on the deferred amount until withdrawn by the employee at age 59?