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
What Is an Income Bond? An income bond is a type of debt security in which only the face value of the bond is promised to be paid to the investor, with any coupon payments paid only if the issuing company has enough earnings to pay for the coupon payment. In the context of corporate
What Is the Income Effect? The income effect, in microeconomics, is the resultant change in demand for a good or service caused by an increase or decrease in a consumer’s purchasing power or real income. As one’s income grows, the income effect predicts that people will begin to demand more (and vice-versa). So-called normal goods
What Is Income Elasticity of Demand? Income elasticity of demand refers to the sensitivity of the quantity demanded for a certain good to a change in the real income of consumers who buy this good. The formula for calculating income elasticity of demand is the percent change in quantity demanded divided by the percent change
What Is Per Capita Income? Per capita income is a measure of the amount of money earned per person in a nation or geographic region. Per capita income is used to determine the average per-person income for an area and to evaluate the standard of living and quality of life of the population. Per capita
What Is Income Risk? Income risk is the risk that the income stream paid by a fund will decrease in response to a drop in interest rates. This risk is most prevalent in the money market and other short-term income fund strategies (versus longer-term strategies that lock in interest rates). Income risk is an extension
What Is an Income Share? An income share is a class of shares offered by a dual-purpose fund. This share class pays out distributions and dividends to its investors. Income shares may also be known as preferred shares. Key Takeaways An income share is a class of shares offered by a dual-purpose fund; this share
What Is Income Shifting? Income shifting, also known as income splitting, is a tax planning technique that transfers income from high to low tax bracket taxpayers. It is also used to reduce the overall tax burden by moving income from a high to low tax rate jurisdiction. Key Takeaways Income shifting is also referred to as income
