Tax Advantage

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Tax Advantage

Any act or structure that reduces the amount of tax one pays. For example, one may derive a tax advantage by investing in a tax-exempt bond as opposed to a corporate bond (on which one pays taxes). Numerous tax advantages are built into tax codes in order to encourage certain behavior. For example, in the United States, one derives a tax advantage from writing off the interest on one's mortgage. This structure exists to encourage homeownership.
References in periodicals archive ?
Note that tax-advantaged bond funds are not good investments for IRAs and 401(k)s because these are tax-deferred accounts, so the tax advantage is lost.
These would have to be notified to Customs if the main purpose of entering into these arrangements, or one of the main purposes, was to gain a tax advantage.
If you were to hold a muni bond in an IRA, you would be accepting that lower yield without getting the muni-bond tax advantage, since taxes on investment income in an IRA are already deferred until you withdraw money from your account, perhaps many years from now.
S corps enjoy many significant tax advantages, including:
The tax advantages discussed above offer unique opportunities to qualifying Farmers, not afforded to other businesses.
First, paired-share REITs do not enjoy a tax advantage over other real estate companies.
In that case, the shareholder-employees of the parent company might be able to participate in employee benefits offered by the lower tier company and receive the tax advantages that only a C corporation can provide its employees.
The Pension Protection Act of 2006 made the tax advantages of 529 plans permanent.
The election continues to make it possible for taxpayers to gain various income tax advantages available to estates, but not otherwise available to trusts.
It provides the tax advantages of an individual retirement account and the medical expense funding options of a flexible spending account.
Not only can leasing help you avoid tying up working capital, it also can eliminate annual budget constraints, assist companies that need to restrict debt on their books and provide potential tax advantages.
Absent tax advantages, C corporations have advantages because of the LLC's restrictions on transferability of ownership and limited life.