Tax Glossary

Tax Glossary

All | A B C D E F G H I J L M N O P Q R S T U V W
There are currently 9 Definitions in this directory beginning with the letter B.
Basic allowance for housing, a type of excludable military income.

Basic allowance for subsistence, a type of excludable military income.

The basis in a home is determined by how the taxpayer obtained the home. If a taxpayer bought or built a home, the basis is what it cost the taxpayer to buy or build that home. If the taxpayer inherited the home, generally the basis is its fair market value on the date of the decedent's death, or on the later alternate valuation date chosen by the representative for the estate. There are special rules for determining the basis of property received from decedents who died in 2010.

Before-tax Contributions
Before-tax simply means that the employee did not pay taxes on the money at the time it was contributed, i.e., the taxpayer has no cost basis in the plan.

Blocked income
Blocked income is when a taxpayer cannot convert foreign currency to U.S. dollars due to local law or local government policy. Special tax rules allow taxpayers with blocked income to delay reporting part of their income.

Bona Fide Residence Test
To meet the bona fide residence test for the foreign earned income exclusion, taxpayers must show that they have set up permanent quarters in a foreign country for an entire, uninterrupted tax year.

Business Expenses
Business expenses are amounts that are ordinary and necessary to carry on a business.

Business Income
Business income is income received from the sale of products or services. For example, fees received by a professional person are considered business income. Rents received by a person in the real estate business are business income. Payments received in the form of property or services must be included in income at their fair market value.

Business Travel Expenses
Qualified business expenses for members of the armed forces such as uniforms, education and travel. Military employee business expenses are necessary business-related expenses incurred by active members of the U.S. Armed Forces.