Investor Glossary-exempt incomeInvestor Glossary-exempt incomeInvestor Glossary-exempt incomeInvestor Glossary-exempt incomeInsightful stock market charts - Click here
investor
Categories    # 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

Exempt Income

The HTML to link to this page
 

Exempt income is any income that is not subject to taxation by federal, state or local taxing authorities. Examples of exempt income include welfare benefits, Social Security benefits, nontaxable pensions and certain life insurance benefits. Income from city and county municipal bonds are also a common form of exempt income. Expenses incurred to gain exempt income are not deductible. If funds are borrowed to purchase tax-exempt municipal bonds, the interest paid on the borrowed funds is not deductible. Circumstances exist in which expenses are incurred to gain both taxable income and exempt income. In this instance, one can reasonably divide the expenses based upon the facts of the situation. However, an explanation of the percentages used must be attached to the filed taxes. A statement must also be attached stating that no expense deductions were made from the gain of exempt income. Regarding deduction of state income tax on a federal taxes, if a taxpayer itemizes deductions, state income tax on interest income considered exempt income from federal income tax can be deducted. This does not apply to other exempt income.



Rate this Exempt Income definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: in escrow, wholly-owned subsidiary, risk management, phantom income, class C shares, deferred tax, minority interest, 1031 exchange, command economy, stock market close, VIX, 144a, average price per share, cancelled check, deferred revenue, 401a, 1035 exchange, EBITDA, required rate of return, debt service coverage, option premium, current ratio, margin rate, open position, limit order, reverse mortgage, FICO score, Zero Cost Collar, covered put, ex-dividend, FTSE, real GDP, liquidity ratio, LIBOR, labor relations, balance sheet, implied volatility, Key Rate Duration, irrevocable trust, diluted share, quality assurance, retained earnings, stock split, inflation, APR, ex-dividend date, dividends payable, annual return, per diem


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use