Income baskets

Income baskets

Category to which certain income is allocated. Losses in one basket may not be used to offset gains in another basket. Specified in U.S. tax code.

Income Baskets

Several categories of income used for tax purposes. Unless the U.S. Tax Code states otherwise, a loss in one income basket can be used to offset a profit in another income basket. Thus, one only owes taxes on the net income after all, relevant baskets have been offset.
References in periodicals archive ?
Two new income baskets, dividends from each 10/50 PFIC and dividends from 10/50 corporations, were introduced for Tax Year 2003, effectively replacing the noncontrolled section 902 corporation basket from prior years.
Taxpayers are required to calculate this limitation for each income basket.
Beginning in 2007, the number of foreign-source income baskets is reduced from nine to two: passive and general limitation.
In the international area, one provision reduces the number of income baskets for foreign tax credits from nine to two--one passive income basket and one general one.
For tax years beginning after 2006, AJCA Section 404 consolidates the nine FTC baskets into passive income and general income baskets.
taxpayer to such income); such high-taxed income is excluded from the passive income basket and included in the general limitation basket.
Any remaining related-person interest (after Step 2) is apportioned to other income baskets based on either gross income or asset value, as provided in Temp.
861-9T(g), interest expense is apportioned to various income baskets based on the average value (i.
Under the lookthrough rules, Subpart F income and payments (or deemed payments) of interest, rent, royalties and dividends are included in separate baskets by reference to the CFC's income baskets.
Subpart F income is generally treated as income in separate baskets in the same proportion as the CFC's underlying income baskets.
865-1T(b) states that losses recognized on depreciable property are allocated between income baskets based on the allocation of depreciation deductions previously claimed on the property.
904 that determine whether passive income is "highly taxed" for purposes of assigning an item of income and its related FTCs to the passive or general limitation income basket.