| Term |
Definition |
| Gain |
The excess of the amount
realized from a sale or exchange over the
adjusted basis of the property sold or exchanged. |
| General Depreciation
System |
The most commonly used
MACRS system. Personal property is depreciated
using the declining-balance method (double or 150
percent, depending on the recovery class)
switching to straight line when that method
results in the larger deduction. Residential
rental property is depreciated using the straight-line
method over 27.5 years, and nonresidential real
property is depreciated using the straight-line
method over 39 years (31.5 years for property
placed in service before May 13, 1993). |
| General Rule |
Used to determine the
taxable portion of a pension or annuity. |
| General Straight-Line
Depreciation System |
A MACRS system of
depreciation using the straight-line method over
the normal MACRS recovery period for the asset. |
| Gift |
A transfer of property
from one person or entity to another without
consideration or compensation. For income tax
purposes, the words "gift" and "contribution"
usually have separate meanings, the latter word
being used in connection with contributions to
charitable, religious, etc., organizations,
whereas the word "gift" refers to
transfers of money or property to private
individuals, needy persons, friends, relatives,
etc. The recipient of a gift is not required to
include it in his gross income, and the maker of
the gift is not entitled to deduct it (except for
business gifts to customers of $25 or less per
donee per year). |
| Gift Tax |
A graduated federal tax
paid by donors on gifts exceeding $10,000 per
year per donee. |
| Golden Parachute |
An agreement entered
into by a corporation with its top executives to
make substantial payments to the executives in
the event of a change in corporate control. Such
payments are treated as compensation. |
| Goodwill |
The ability of a
business to generate income in excess of a normal
rate on assets due to superior managerial skills,
market position, new product technology, etc. In
the purchase of a business, goodwill represents
the difference between the purchase price and the
value of the net assets. Goodwill acquired after
August 10, 1993, must be amortized over a 15-year
period and is subject to recapture when the
business is sold. Amortization is computed on
Form 4562. |
| Government Bonds
Issued at a Discount |
Certain U.S. Government
bonds (Series E and EE) are issued at a discount
and do not pay interest during the life of the
bond. Instead, the bonds are redeemable at
increasing fixed amounts. Thus, the difference
between the purchase price and the amount
received upon redemption represents interest
income to the holder. A cash-basis taxpayer may
defer recognition of taxable income until such
bonds are redeemed or until the year of final
maturity, whichever is earlier. Alternatively,
the taxpayer may elect to include the annual
increase in the value of the bond in gross income
on an annual basis. |
| Gross Income |
Total worldwide income
received in the form of money, property, or
services that is subject to tax unless
specifically exempt or excluded by law. |
| Gross Rents |
Total income from rents
before expenses or the depreciation or cost
recovery deduction. |
| Group Term Life
Insurance |
Life insurance coverage
purchased by an employer for a group of employees.
Such insurance is renewable on a year-to-year
basis and does not accumulate in value; that is,
no cash surrender value is built up. The premiums
paid by the employer on such insurance are
usually not taxed to an employee unless coverage
exceeds $50,000. |
| Guaranteed Return |
A specific amount to be
paid by an annuity. This may be a certain payment
for a given number of years or a given amount to
be paid regardless of death. |
