tax shelter


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Tax shelter

Legal methods taxpayers can use to reduce tax liabilities. An example is the use of depreciation of assets.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Tax Shelter

An investment vehicle that reduces one's tax liability. For example, a 401(k) defers taxation until withdrawal from the account and may therefore be considered a tax shelter. Tax shelters are legal unless their sole purpose is to avoid taxes. See also: Tax evasion.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

tax shelter

An investment that produces relatively large current deductions that can be used to offset other taxable income. Popular tax shelters include real estate projects and gas and oil drilling ventures. Also called shelter. See also abusive tax shelter.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

tax shelter

An investment that generates paper losses or tax credits that may be used to offset other income and thus reduce taxes.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
RELATED ARTICLE: Abusive Tax Shelter Disclosure and Control
The basic concept is presented in the example below, which illustrates the potential results of tax shelters that were available to investors before the enactment of legislation designed to curb the use of these shelters.
In a decision released shortly after the Tax Court's decision in the Countryside case, the Seventh Circuit in Valero upheld the district court's order, rejecting Valero's claim that the tax shelter exception to the tax practitioner/client privilege did not apply to the documents in question.
Any person who organizes and sells potentially abusive tax shelters is required to maintain a list identifying each person who purchases an interest in any such tax shelter, along with any additional information required by the IRS.
Schallheim and Wells (2006) measure nondebt tax shields based on the difference between taxes paid and financial statement tax expense in an attempt to capture the effect of "off financial statement" deductions such as accelerated depreciation, stock option deductions, tax shelters, and the like.
At the time, the IRS was investigating more than 100 tax shelter promoters, including accounting firms, law firms, and financial institutions.
Although perhaps not usually thought of as a tax shelter, contributing to an RRSP is, in fact, the best known and most popular tax shelter.
The new regulations also apply to providers of tax shelter plans.
The Canadian financial community became aware of the industry and sensitive to the possibilities of tax shelter as an attractive vehicle for wealthy individuals and corporations.
* Legislation in 2004 created significant new penalties for the failure to disclose a reportable tax shelter transaction and for an understatement of tax related to a tax shelter transaction.
The Franchise Tax Board will follow the IRS tax shelter settlement initiative as outlined in IRS Announcement 2005-80, effectively creating the California Tax Shelter Resolution Initiative to run alongside the federal initiative.