income

The return in money from one's business, labor, or capital invested; gains, profits, salary, wages, etc. The gain derived from capital, from labor or effort, or both combined, including profit or gain through sale or conversion of capital. Income is not a gain accruing to capital or a growth in the value of the investment, but is a gain, a profit, something of exchangeable value, proceeding from the property, severed from the capital, however invested or employed, and coming in, being derived, that is, received or drawn by the recipient for his separate use, benefit, and disposal. Goodrich v. Edwards, 255 U.S. 527, 41 S.Ct. 390, 65 L.Ed. 758.

The true increase in amount of wealth which comes to a person during a stated period of time. That which comes in or is received from any business, or investment of capital, without references to outgoing expenditures. City of Fitzgerald v. Newcomer, 162 Ga.App. 646, 291 S.E.2d 766, 768.

See also

- allocation of income

- blocked income

- clear reflection of income

- constructive receipt of income

- earnings

- fixed income

- gross income

- income averaging

- income basis;

- income in respect of decedent;

- income tax;

- net income;

- net operating income;

- personal income;

- profit;

- real income;

- split income;

- taxable income; and

- unearned income, below.

@ accrued income

Income earned during a certain accounting period but not received.

+ accrued income

Income which is earned but not yet billed and receivable. In re Schlinger's Will, 48 Misc.2d 345, 438, 265 N.Y.S.2d 32, 35

@ adjusted gross income

The difference between the taxpayers' gross income and allowable adjustments. Adjustments include but are not limited to; contributions to an individual retirement account, alimony payments and reimbursed employee business expenses. I.R.C. No. 162.

+ adjusted gross income

A tax determination peculiar to individual taxpayers. Generally, it represents gross income less business expenses, expenses attributable to the production of rent or royalty income, the allowed capital loss deduction, and certain personal expenses.

See also gross income

+ adjusted gross income

A determination peculiar to individual taxpayers. Generally, it represents gross income less business expenses, expenses attributable to the production of rent or royalty income and the longterm capital gain deduction

@ deferred income

Income received before it is earned, such as rents received in one accounting period for use of the premises in the following period.

+ deferred income

Income received but not yet earned, i.e., prepaid rent or insurance. Deferred income is recorded as a liability on the balance sheet until such time as the income is earned and recorded as revenue

@ earned income

Income derived from one's own labor or through active participation in a business as distinguished from income from, for example, dividends or investments.

See also earnings

+ earned income

Income from services (e.g., salaries, wages, or fees); distinguished from passive, portfolio, and other unearned income.

See I.R.C. No. 911.

In taxation, term generally is meant to include all income not representing return on capital. U.S. v. Van Dyke, C.A. Fed., 696 F.2d 957, 962.

See also earnings

- income

@ fixed income

That type of income which is stable over a considerable period of time such as a pension or annuity.

+ fixed income

That species of income which does not fluctuate over a period of time such as interest on bonds and debentures or dividends from preferred stock as contrasted with dividend income from common stock. May also refer to income received by retiree from pension, annuity, or other form of fixed retirement benefit or income

@

- gross income

@ imputed income

Value assigned to property or income, sometimes artificially for tax purposes, as in the case of a non-interest bearing or low interest bearing loan between persons or organizations related to each other. I.R.C. No. 483. The value of property enjoyed by the taxpayer as part of his salary; e.g. use of home provided by employer to employee. The monetary value of goods and services which someone produces and is consumed within the immediate family unit as well as the monetary value of the use of property which someone within the family unit owns. Imputed income is not included in gross income

@ investment income

See unearned income, below.

@ net income

@ net business income

net (business) income

The profit of a business arrived at by deducting operating expenses and taxes from gross receipts. Income after costs and taxes.

+ net income

Income subject to taxation after allowable deductions and exemptions have been subtracted from gross income. The excess of all revenues and gains for a period over all expenses and losses of the period. Net income for income tax purposes is what remains out of gross income after subtracting ordinary and necessary expenses incurred in efforts to obtain or to keep it. Waiting's Estate v. C. I. R., C.A.Pa., 373 F.2d 190, 193.

See also distributable net income

- net profits

- taxable income

@ nonoperating income

Income of a business from investments and not from operations.

@ operating income

Income derived from operations of business in contrast to income from investments.

@

- ordinary income

- personal income

@ income received but not yet earned

Normally, such income is taxed when received, even for accrual basis taxpayers

@ income averaging

Method of computing tax by averaging an individual's current income with that of the three preceding years. Income averaging was common with individuals such as athletes, or actors whose income may be very high in a given year in contrast to prior years. The tax benefits of income averaging were repealed with the Tax Reform Act of 1986

@ income basis

Method of computing the rate of return on a security based on the dividend or interest and on the price paid rather than on its face or par value

@ income beneficiary

The party entitled to income from property. A typical example would be a trust where A is to receive the income for life with corpus or principal passing to B upon A's death. In this case, A would be the income beneficiary of the trust

@

- income bond

@ income exclusions

Items of income which are not subject to federal taxes. An example of such includes interest earned on municipal bonds, as well as money or property received by gift or inheritance

@ income in respect of decedent

Income earned by a decedent at the time of death but not reportable on the final income tax return because of the method of accounting utilized. Typically it includes any accrued income to date of death for cash basis decedent/taxpayer. Estate of Rose, 465 Pa. 53, 348 A.2d 113, 116.

Such income is included in the gross estate and will be taxed to the eventual recipient (i.e., either the estate or heirs). The recipient will, however, be allowed an income tax deduction for the death tax attributable to the income. I.R.C. No. 691.

In estate taxation, term refers to inclusion of certain income in estate as if it had been collected by decedent in his or her lifetime, Grill v. U. S., 157 Ct.Cl. 804, 303 F.2d 922, 927, e.g. payments received toward satisfaction of a right or expectancy created almost entirely through the efforts or status of the decedent and which, except for his death and without further action on his part, the decedent would have realized as gross income

@ income property

Property which produces income; e.g. rental property. Such property can be either residential, commercial, or industrial

@ income security

Government programs to maintain the income of people, including Social Security, government pensions, unemployment compensation, welfare, food stamps, disability benefits, subsidized housing, and energy assistance. Medicare and Medicaid are categorized as health programs

@ income shifting

An attempt by a taxpayer to transfer money to one or many family members in an effort to reduce the transferors' tax liability. The Tax Reform Act of 1986 has reduced the benefits of income shifting by such regulations as; taxing children under the age of 14 on unearned income (interest and dividends) at the parents' highest rate.

See kiddie tax

@ income splitting

See joint tax return

@ income statement

The statement of revenues, expenses, gains, and losses for the period ending with net income (or loss) for the period. A financial statement that indicates how a firm performed during a period of time.

See also balance (balance sheet)

- earnings report

- profit and loss statement

@ income tax

A tax on the annual profits arising from property, business pursuits, professions, trades, or offices. A tax on a person's income, wages, salary, commissions, emoluments, profits, and the like, or the excess thereof over a certain amount. Tax levied by the U.S. Government, and by some state governments, on an individual, corporation, or other taxable unit's income.

See also tax

@ income tax deficiency

Such exists whenever taxpayer has failed to pay sufficient taxes on income, notwithstanding lack of determination by commissioner or his agents. Moore v. Cleveland Ry. Co., C.C.A.Ohio, 108 F.2d 656, 659. 26 U.S.C.A. No. 6211 et seq.

See deficiency notice

- ninety day letter

@ income tax return

Forms required by federal and state taxing authority to be completed by taxpayer, disclosing all items necessary for computation of tax and the computation itself.

See also return

@