tax-sheltered income

Tax-Sheltered Income

Income that would normally be taxable but because of a non-cash deduction, notably depreciation, is not taxed. For example, income from the lease of a car where the lessor maintains title to the car can be tax-sheltered income because of the depreciation on the value of the car.

tax-sheltered income

The income that is received and would ordinarily be taxable but, because of certain noncash deductions such as depreciation, is protected from taxation. For example, rent that has been earned from a rental property is generally sheltered by depreciation on the property. Compare tax-deferred income, tax-free income.
References in periodicals archive ?
Under a sales tax, affluent persons who receive tax-sheltered income or profit handsomely from the complexities and confusion of the current system (such as tax lawyers and other tax professionals) will have to relinquish their favored place in the American economic system.
Under a sales tax, affluent persons who receive tax-sheltered income or profit handsomely from the complexities of the tax system may have to relinquish their relative advantage, as average Americans see their real wages and purchasing power increase.
While many Canadians make their RRSP contributions on the last possible day, you should consider making the contribution earlier, thereby maximizing the benefits of earning tax-sheltered income.