phantom income

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Phantom income

Income from a limited partnership that creates taxability without generating cash flow.
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Phantom Income

Taxable income that does not result from cash flow. Examples include zero-coupon bonds, which are taxed as if they had a coupon, and house value increases that result in higher property taxes. See also: Phantom Gain.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

phantom income

Reportable or taxable income that does not generate cash flows to pay the taxes on the income. A disclosure that “taxable income may exceed economic income” is the clue that an investor may receive phantom income.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.