ordinary income

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Ordinary income

The income derived from the regular operating activities of a firm or individual.

Ordinary Income

In taxation, income from wages or salaries, interest, or commissions. Ordinary income is received in the short-term; for example, one usually receives a paycheck every two weeks or interest on a bond a few times per year. Ordinary income differs from capital gain, which is income from investment and is usually realized over a longer period of time. Most ordinary income is taxed at a higher rate than capital gain, so as to encourage long-term investment. In the United States, dividends were taxed as ordinary income, but this changed in 2003. One may think of ordinary income as income from one's job and/or standard business transactions.

ordinary income

Income that does not qualify for special tax treatment. Wages, dividends, and interest are ordinary income.

ordinary income

Income subject to full or ordinary taxation rates. Contrast with capital gains.
References in periodicals archive ?
That the holders of Ordinary Income shares and Zero Dividend Preference shares
Section 1245 property has significant depreciation recapture rules in a section 1031 exchange; generally the replacement property must contain the same value of section 1245 property as the relinquished property, or the taxpayer will recapture the difference (up to the realized amount) at ordinary income tax rates.
Thus, if there is a vertical carve-out, the second factor--character of the asset--determines whether the sale proceeds should be taxed as ordinary income or capital gain.
Packaged Units (each comprising one New Ordinary Income Share and one New
Ordinary income asset: If the residence purchased by the employer is characterized as an ordinary income asset, and the employer subsequently sells the residence for a profit, ordinary income results and is taxed at the same rate as a capital gain.
9 million Ordinary Income shares elected to roll over their
In the above example the shareholder recognizes $20 ordinary income from operations and either $4 of capital gain or ordinary income, depending on the nature of the debt.
The proceeds were ordinary income because the original transaction was taxed in this manner.
197 intangible, recapture rules may require treating any resulting gain as ordinary income.
Lottery winnings generally are taxed as ordinary income in the year a taxpayer receives them.
An IRS Form 1099-DIV will be sent to stockholders indicating the tax characteristic of the distributions they received in 2006, and exactly how much is net investment income, ordinary income, capital gains, if any, and return of capital.
With the large disparity in long-term capital gain and ordinary income tax rates, most taxpayers are seeking capital gain treatment.