phantom income

Phantom income

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

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.

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.

References in periodicals archive ?
While this result is not ideal, noncorporate taxpayers could endure an even worse fate--double taxation on this phantom income.
However, with proper tax and investment planning, the carryover of disallowed passive losses from earlier years may reduce or eliminate the phantom income in later years.
Fortunately, precedent originating in Depression Era tax cases offers relief from taxation of this phantom income.
In these two states, taxpayers should consider filing amended returns for the last three years, taking the position that the amounts reported as dividends and interest were either phantom income or a return of capital and therefore not taxable.
Most investors in such schemes have paid capital gains taxes on phantom income for the duration of their investments; consequently, the discovery that these profits were fictitious raises a slew of questions about whether and how to recoup any taxes remitted.
Phantom income is income reported as income by the fraudulent arrangement, but not income in reality because the monies labeled "income" were derived from other investors and not from a return on the investment.
Besides eliminating the phantom income tax for three years, the Senate's debt relief bill also extends the tax deductibility of private and FHA mortgage insurance premiums through 2010.
Phantom Income (Rick Violette) won a Belmont maiden race by more than ten lengths on her debut, while More Happy (Bob Baffert) was a maiden winner at Del Mar on her only previous outing.
The imputation of phantom income and expense with respect to such CLAs would lead to absurd results in the case of taxpayers that enter into multiple CLAs in highly competitive industries.
Had Vedder read the article, he would have found that the Chronicle reported my salary to be $183,000; other income included a one-time payment of $513,333 in replacement of unused sabbatical leaves over 30 years of service and $334,241 in taxable phantom income from an insurance policy.
The result is that properties with lesser economic value are at risk of deterioration as the investors have no incentive to invest funds in a property that has little or no cash flow and often generates phantom income for the investors.