Constructive Receipt – Explained

by | Feb 23, 2025 | Business Taxation

What is Constructive Receipt?Constructive receipt is a doctrine used by the Internal Revenue Service (IRS) that requires individuals and businesses to pay income taxes on their earnings even if the earnings have not been received. When the IRS applies the constructive...

Foreign Tax Credit – Explained

by | Feb 23, 2025 | Business Taxation

What is a Foreign Tax Credit?The foreign tax credit refers to a credit that individuals who pay taxes to foreign government receive from the Internal revenue Service. This tax credit is a means of preventing individuals from paying double taxes on income, earnings or...

Severance Tax – Explained

by | Feb 23, 2025 | Business Taxation

What is a Severance Tax?A severance tax is a tax imposed by the state on natural resources that are extracted within the jurisdiction of the state but intended for use in another state. Individuals or miners pay severance tax on the vale of non-renewable natural...

Recapture – Explained

by | Feb 23, 2025 | Business Taxation

What is a Tax Recapture?Recapture concerns a situation in which a taxpayer records a tax deduction in one year but must report the amount of deduction as income in a later year.How Does the Recapture of Taxes Work?Depreciation recapture takes place when the taxpayer...

Step Up in Basis – Explained

by | Feb 23, 2025 | Business Taxation

What is a Step-up in Basis?The revaluation of an increase in value of an asset when it is inherited for tax-based purposes is known as step- in basis. It is the greater market value of the asset that is used for tax-based purposes during inheritance. The value of...

Deferred Income Tax – Explained

by | Feb 23, 2025 | Business Taxation

What is Deferred Income Tax?A deferred income tax is a tax (liability) that appears on a company’s balance sheet that is due for the current period buy is yet to be paid. This type of tax is a portion of a company’s taxable income for a current year which...