tax-deferred income

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Tax-deferred income

Dividends, interest, and unrealized capital gains on investments in an account such as a qualified retirement plan, where income is not subject to taxation until a withdrawal is made.

Tax-Deferred Income

Any income that one earns but does not receive until a later date, resulting in a situation in which taxes on the income are not paid until later. Common examples of tax-deferred income fall into two broad categories. The first is income in certain retirement accounts; the account holder is not liable for taxes until funds are disbursed. The second is the capital gain on some bonds such as U.S. Treasury securities; taxes on these gains are deferred until maturity. It is important to note that tax-deferred income is not the same as tax-free income, which has no tax liability at all.

tax-deferred income

The income that is earned but that is neither received nor taxed until a later date. For example, interest earned on U.S. Treasury bills is received and taxed at maturity. Likewise, U.S. savings bonds provide appreciation of value on which holders may defer paying taxes until the security is cashed in. Compare tax-free income, tax-sheltered income.
References in periodicals archive ?
With gross returns, no internal tax charge, tax deferred income, full fund management, ready access and simple administration; they are proving to be extremely popular.
In this unique transaction, both the buyer's and the seller's intentions were to utilize 1031 exchange agreements, which created relatively quick tax deferred income and mutually favorable returns for both parties, indicating an upward trend in multi-family sale activity and an overall healthier marketplace within New Jersey," remarked Berger.
Some other longer-term options are capital investment bonds which offer you the opportunity to invest a lump sum for an undefined period of time, and a tax deferred income can be taken.