Taxation

Schedule E

Schedule E is the portion of the federal income tax return where the taxpayer reports all supplemental income and loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, etc. The taxpayer attaches Schedule E to his or her Form 1040 when filing the return.

Schedule D

Schedule D is the portion of the federal income tax return where the taxpayer itemizes all realized capital gains and losses. The taxpayer attaches Schedule D to his or her Form 1040 when filing the return.

Schedule C

Schedule C is the portion of the federal income tax return where the taxpayer reports all profit or loss from a sole proprietorship. The taxpayer attaches Schedule C to his or her Form 1040 when filing the return.

Schedule B

Schedule B is the portion of the federal income tax return where the taxpayer itemizes all interest and dividend income. The taxpayer attaches Schedule B to his or her Form 1040 when filing the return.

Schedule A

Schedule A is the portion of the federal income tax return where the taxpayer itemizes all income tax deductions, including charitable deductions. The taxpayer attaches Schedule A to his or her Form 1040 when filing the return.

Transfer Tax

Transfer tax is the generic term applied to any tax that is assessed when assets are transferred from one individual to another. Federal transfer taxes include estate tax, gift tax, and generation skipping tax. State transfer taxes include death tax.

Threshold for 3% Deduction Reduction

Taxpayers who declare adjusted gross income in excess of a certain threshold must reduce their itemized deductions by 3% of that excess. Itemized deductions include state and local taxes, mortgage interest, and other itemized deductions, as well as charitable deductions. The reduction is limited to no more than 80% of the taxpayer's total itemized deductions.

3% Deduction Reduction Rule

Taxpayers who declare adjusted gross income in excess of a certain threshold must reduce their itemized deductions by 3% of that excess. Itemized deductions include state and local taxes, mortgage interest, and other itemized deductions, as well as charitable deductions. The reduction is limited to no more than 80% of the taxpayer's total itemized deductions.

Life Income Interest, Assignment of

An income beneficiary of a planned gift may assign to charity his or her right to future payments from the planned gift at any time. The present value of these future payments is the beneficiary's life income interest in the gift. The beneficiary of a charitable remainder trust or pooled income fund is eligible for a charitable income tax deduction equal to the value of his or her life income interest on the day the beneficiary assigns the interest to charity.