What Is an Indexed Annuity? An indexed annuity is a type of annuity contract that pays an interest rate based on the performance of a specified market index, such as the S&P 500. It differs from fixed annuities, which pay a fixed rate of interest, and variable annuities, which base their interest rate on a
What Is an Incentive Trust? An incentive trust is a legally-binding fiduciary relationship in which the trustee holds and manages the assets contributed to the trust by the grantor. In an incentive trust arrangement, the trustee must adhere to specific requirements set out by the grantor regarding what conditions the trust’s beneficiaries must meet in
What Is an Inchmaree Clause? An Inchmaree clause is found in maritime insurance policies and provides coverage for the ship’s hull from loss or damage caused by machinery. The Inchmaree clause, also called the negligence clause, covers damage that is caused by the negligence of ship personnel, such as engineers and captains, when navigating. It
What Is the Incidence Rate? The term incidence rate refers to the rate at which a new event occurs over a specified period of time. Put simply, the incidence rate is the number of new cases within a time period (the numerator) as a proportion of the number of people at risk for the disease
What Are Incidents of Ownership? A person (including a trustee) has incidents of ownership if they have the right to change beneficiaries on a life insurance policy, to borrow from the cash value, or to change or modify the policy in any manner. This occurs even if the person chooses not to act on it and
What Is Inclusion Amount? Inclusion amount is an additional amount of income that a taxpayer may have to report if they leased a vehicle or other property for business purposes. The inclusion amount must be reported if the fair market value of the leased asset exceeds a certain threshold. Breaking Down Inclusion Amount A taxpayer
What Is Income? Income refers to the money that a person or entity receives in exchange for their labor or products. Income may have different definitions depending on the context—for example, taxation, financial accounting, or economic analysis. For most people, income means their total earnings in the form of wages and salaries, the return on
What Is Income in Respect of a Decedent? Income in respect of a decedent (IRD) refers to untaxed income that a decedent had earned or had a right to receive during their lifetime. IRD is taxed to the individual beneficiary or entity that inherits this income. However, IRD also counts toward the decedent’s estate for federal
What Is the Income Approach? The income approach, sometimes referred to as the income capitalization approach, is a type of real estate appraisal method that allows investors to estimate the value of a property based on the income the property generates. It’s used by taking the net operating income (NOI) of the rent collected and
What Is an Income Basket? An income basket is a category of income as defined by the U.S. tax code. Each category, or basket, represents a different source of income. Baskets may operate at a net gain or a net loss individually. However, a loss in one basket may not be used to offset taxable
