Dictionary of Law
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

capital gains :: legal definition


Capital gains - n. the difference between the sales price and the original cost (plus improvements) of property. Capital gains taxes can be a terrible financial shock to individuals who bought a house or business many years ago for the going price and now find it is highly valued, greatly due to inflation. Example: a couple buy a house in 1950 for $20,000 (then a high price) and upon retirement want to sell it for $400,000. There is a potential of tax on a $360,000 gain. There are some statutory cushions to ease this blow, such as a one-time $125,000 deduction from the gain (profit) on sale of real property if the seller is over 55, deferred (temporarily put off) tax if investment property is "exchanged" (profits are invested in other property) under strict rules, making lifetime gifts to children or charity, or buying another home. Another escape is death, which gives the property to heirs at the value on the day of the owner's death without capital gains tax ("stepped up basis"). Reduction of capital gains tax rates has been resisted by a majority of Congress, partly because lowering the rate generally would become a tax break for the wealthy.

See also: basis delayed exchange exchange and Related Law Terms ↓


Related Law Terms

acceleration clause :: n. a provision in a contract or promissory note th ... . See also: acceleration assumption
ad valorem :: adj. Latin for "based on value," which applies to ... per parcel. See also: property tax
adjusted basis :: n. in accounting, the original cost of an asset ad ... s taxes. See also: basis income tax
appraiser :: n. a professional who makes appraisals of the valu ... isal Institute). See also: appraise
assess :: v. to set a value on property, usually for the pur ... e place upon sale of real property.
bankruptcy :: n. a federal system of statutes and courts which p ... y proceedings trustee in bankruptcy
basis :: n. the original cost of an asset to be used to det ... ssistance. See also: adjusted basis
Bill of Rights :: n. the first ten amendments to the federal Constit ... ved to the states or to the people.
capital offense :: n. any criminal charge which is punishable by the ... . See also: bail capital punishment
capital punishment :: n. execution (death) for a capital offense. The U. ... or death. See also: capital offense
capital stock :: n. the original amount paid by investors into a co ... price. See also: corporation stock
community property :: n. property and profits received by a husband and ... and distribution separate property
cooperative :: n. an association of individual businesses, farmer ... exes. See also: cooperative housing
dealer :: n. anyone who buys goods or property for the purpo ... ins taxes by buying other property.
deficiency judgment :: n. a judgment for an amount not covered by the val ... o: foreclosure judicial foreclosure
delayed exchange :: n. an exchange of property to put off capital gain ... method and survived an IRS lawsuit.
double taxation :: n. taxation of the same property for the same purp ... it is not discriminatory or unfair.
equity :: n. 1) a venerable group of rights and procedures t ... ry enjoin equitable injunction writ
exchange :: 1) v. to trade or barter property, goods and/or se ... ins tax. See also: delayed exchange
execution :: n. 1) the act of getting an officer of the court t ... so: death penalty writ of execution
fair market value :: n. the amount for which property would sell on the ... so: appraise appraiser market value
foreclosure :: n. the system by which a party who has loaned mone ... ced sale mortgage notice of default
foreclosure sale :: n. the actual forced sale of real property at a pu ... dicial sale mortgage sheriff's sale
forfeit :: v. to lose property or rights involuntarily as a p ... drunk driving. See also: forfeiture
franchise :: 1) n. a right granted by the government to a perso ... on property, income or profits tax.
general partner :: n. 1) usually one of the owners and operators of a ... ted partnership partner partnership
gift in contemplation of death :: n. (called a gift causa mortis by lawyers showing ... ift tax unified estate and gift tax
goodwill :: n. the benefit of a business having a good reputat ... an unknowing buyer. See also: sale
heir :: n. one who acquires property upon the death of ano ... y pretermitted heir succession will
impound :: v. 1) to collect funds, in addition to installment ... cases. See also: forfeit forfeiture
in kind :: adj. referring to payment, distribution or substit ... . See also: distribution trust will
insider :: n. someone who has a position in a business or sto ... ange Act. See also: insider trading
interest :: n. 1) any and all, partial or total right to prope ... nal property real property standing
joint tenancy :: n. a crucial relationship in the ownership of real ... ty property tenancy in common title
lease :: 1) n. a written agreement in which the owner of pr ... triple net lease unlawful detainer
leverage :: 1) n. the use of borrowed money to purchase real e ... e been created by risky leveraging.
levy :: 1) v. to seize (take) property upon a writ of exec ... heriff's sale tax writ of execution
lien :: n. any official claim or charge against property o ... ord's lien mechanic's lien mortgage
life estate :: n. the right to use or occupy real property for on ... hter, Sadie, will own the property.
limited partnership :: n. a special type of partnership which is very com ... mited liability partner partnership
literary property :: n. the writings of an author which entitles him/he ... as copyrighted. See also: copyright
living trust :: n. sometimes called an inter vivos (Latin for "wit ... thrift clause trust trustee trustor
marital deduction :: n. an estate tax deduction allowed a surviving spo ... community property estate tax trust
market value :: n. the price which a seller of property would rece ... ich are often called "comparables."
mortgage :: n. a document in which the owner pledges his/her/i ... losure notice of default trust deed
non-profit corporation :: n. an organization incorporated under state laws a ... harity corporation cy pres doctrine
partner :: n. 1) one of the co-owners and investors in a "par ... ner limited partnership partnership
partnership :: n. a business enterprise entered into for profit w ... partnership partner silent partner
pro rata :: (proh rat-ah or proh ray-tah) adj. from Latin for ... e year in which he/she holds title.
property tax :: n. an annual governmental tax on real property or ... are made. See also: ad valorem tax
protest :: 1) v. to complain in some public way about any act ... dishonored (not paid by the bank).
real estate investment trust :: n. nicknamed REIT, a real estate investment organi ... its upon sale-if there is a profit.
remainder :: n. in real property law, the interest in real prop ... ed reversion title vested remainder
rental value :: n. the amount which would be paid for rental of si ... alimony to be paid. See also: rent
resulting trust :: n. a trust implied by law (as determined by a cour ... See also: constructive trust trust
sheriff's sale :: n. an auction sale of property held by the sheriff ... so: execution forced sale levy writ
special circumstances :: n. in criminal cases, particularly homicides, acti ... urant. See also: capital punishment
statute of limitations :: n. a law which sets the maximum period which one c ... ies. See also: demurrer laches toll
tax :: n. a governmental assessment (charge) upon propert ... unified estate and gift tax use tax
title report :: n. the written analysis of the status of title to ... lso: abstract title title insurance
tort :: n. from French for "wrong," a civil wrong or wrong ... nce slander trespass wrongful death
trust :: n. an entity created to hold assets for the benefi ... testamentary trust trustee trustor
use tax :: n. a state tax on goods purchased in another state ... e" tax equivalent to its sales tax.

Popular Law Searches

legal definition ministerial act :: n. an act, particularly of a governmental employee ... exercising any individual judgment.
chancery legal definition :: n. a court that can order acts performed. Today ch ... ts in most states. See also: equity
testamentary disposition legal definition :: n. how the terms of a will divide the testator's ( ... named beneficiaries. See also: will
contract of sufferance :: n. a "hold-over" tenancy after a lease has expired ... y tenancy at will unlawful detainer
forthwith legal definition :: adv. a term found in contracts, court orders and s ... mediacy, with no excuses for delay.
forthwith definition legal :: adv. a term found in contracts, court orders and s ... mediacy, with no excuses for delay.
what is to wit in a legal contract :: prep. that is to say. Example: "the passengers in ... tty Bumgartner and Sherry Younger."
mirror wills legal definition :: n. the wills of a husband and wife which are ident ... d each names the other as executor.
clean hands doctrine latin :: n. a rule of law that a person coming to court wit ... ices. See also: affirmative defense
sine qua non only relates to contract law :: (see-nay kwah nahn) prep. Latin for "without which ... qua non of the injury to Playmate.

Other Law Terms - C

C.I.F. :: n. the total of cost, insurance and freight charge ... aid on goods purchased and shipped.
calendar :: 1) n. the list of cases to be called for trial bef ... clerk of the court calendars cases.
calendar call :: n. the hearing at which a case is set for trial. ... g at which a case is set for trial.
call :: n. the demand by a corporation that a stockholder ... assessment on shares already owned.
calumny :: n. the intentional and generally vicious false acc ... 's reputation. See also: defamation
cancel :: v. to cross out, annul, destroy, void and/or resci ... g, so that it cannot be used again.
cancellation :: cancel ... cancel
caning :: n. a punishment for crimes employed in certain Asi ... last century in the United States.
canon law :: n. laws and regulations over ecclesiastical (churc ... nduct with no religious connection.
cap :: n. slang for maximum, as the most interest that ca ... "adjustable rate" promissory note.
capital :: 1) n. from Latin for caput, meaning "head," the ba ... count capital assets stock in trade
capital account :: n. the record which lists all basic assets of a bu ... or the alleged value of good will.
capital assets :: n. equipment, property, and funds owned by a busin ... . See also: capital capital account
capital expenditure :: n. payment by a business for basic assets such as ... y intended to improve productivity.
capital gains :: n. the difference between the sales price and the ... so: basis delayed exchange exchange
capital investment :: capital expenditure ... capital expenditure
capital offense :: n. any criminal charge which is punishable by the ... . See also: bail capital punishment
capital punishment :: n. execution (death) for a capital offense. The U. ... or death. See also: capital offense
capital stock :: n. the original amount paid by investors into a co ... price. See also: corporation stock
capitalization :: n. 1) the act of counting anticipated earnings and ... for conversion into capital assets.