What Is a Quorum? A quorum refers to the minimum acceptable level of individuals with a vested interest in a company needed to make the proceedings of a meeting valid under the corporate charter. This clause or general agreement ensures there is sufficient representation present at meetings before any changes can be made by the
What Is a Qualified Personal Residence Trust (QPRT)? A qualified personal residence trust (QPRT) is a specific type of irrevocable trust that allows its creator to remove a personal home from their estate for the purpose of reducing the amount of gift tax that is incurred when transferring assets to a beneficiary. Qualified personal residence
What Is a Qualified Reservist? A qualified reservist is a member of the military reserve who is not active, but when called to duty, is eligible to make an early withdrawal from a retirement account without incurring the usual early distribution penalty. Under most circumstances, the IRS imposes a penalty of 10% on the taxable amount
What Is a Qualified Trust? A qualified trust is a tax-advantaged fiduciary relationship between an employer and an employee in the form of a stock bonus, pension, or profit-sharing plan. In a qualified trust, the underlying beneficiary may use his or her life expectancy to determine required minimum distribution (RMD) amounts, but other considerations like
What Is a Qualified Widow or Widower? The term qualified widow or widower refers to a tax filing status that allows a surviving spouse to use the married filing jointly tax rates on an individual return. The provision is good for up to two years following the death of the individual’s spouse. The taxpayer must remain unmarried
What Are Qualifying Ratios? Qualifying ratios are measuring devices that banks and other financial institutions use in their loan underwriting process. An applicant’s qualifying ratio, expressed as a percentage figure, plays a key role in determining whether they’ll be approved for financing, and often for the terms of the loan as well. Lenders use qualifying
What Is a Qualifying Annuity? A qualifying annuity is similar to any other annuity, except the IRS has approved it for use within a Qualified Retirement Plan or individual retirement account (IRA). These annuities can be fixed, indexed, or variable depending upon the plan sponsor’s investment objectives. According to Employee Retirement Income Security Act (ERISA) guidelines, contributions
What Is a Qualifying Disposition? Qualifying disposition refers to a sale, transfer, or exchange of stock that qualifies for favorable tax treatment. Individuals typically acquire this type of stock through an incentive stock option (ISO), or through a qualified employee stock purchase plan (ESPP). A qualified ESPP requires shareholder approval before it is implemented. Furthermore
What Is a Qualified Domestic Trust? A qualified domestic trust (QDOT) is a special kind of trust that allows taxpayers who survive a deceased spouse to take the marital deduction on estate taxes, even if the surviving spouse is not a U.S. citizen. Normally, a U.S. citizen surviving spouse can take the marital deduction, but a non-citizen
What Is a Qualifying Relative? A qualifying relative is a person designated by federal income tax code to be allowed to be claimed as a dependent by a taxpayer assuming the taxpayer provided considerable financial support for the qualifying relative during the tax year. Claiming a qualifying relative as a dependent will not currently allow the
