Income Averaging

Legal Definition and Related Resources of Income Averaging

Meaning of Income Averaging

A method of computing income tax whereby an individual taxpayer may elect to treat income as though it had been received over a five year period . Internal revenue Code § 1301, 1302, 1305. See average Base Period Income.

Related Entries of Income Averaging in the Encyclopedia of Law Project

Browse or run a search for Income Averaging in the American Encyclopedia of Law, the Asian Encyclopedia of Law, the European Encyclopedia of Law, the UK Encyclopedia of Law or the Latin American and Spanish Encyclopedia of Law.

Income Averaging in Historical Law

You might be interested in the historical meaning of this term. Browse or search for Income Averaging in Historical Law in the Encyclopedia of Law.

Legal Abbreviations and Acronyms

Search for legal acronyms and/or abbreviations containing Income Averaging in the Legal Abbreviations and Acronyms Dictionary.

Related Legal Terms

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Concept of Income Averaging in the context of Real Property

A short definition of Income Averaging: A method of figuring income tax by paying tax on the average income per year for the past five years. For example: A, a real estate salesperson, earns $10,000 taxable income for 4 years. In the fifth year, A sells a shopping center and earns $100,000 taxable income. A could take the total income for 5 years ($140,000), divide by 5 ($28,000), and pay tax on $28,000 for the past 5 years, less what A has already paid.

Concept of Income Averaging in the context of Real Property

A short definition of Income Averaging: A method of figuring income tax by paying tax on the average income per year for the past five years. For example: A, a real estate salesperson, earns $10,000 taxable income for 4 years. In the fifth year, A sells a shopping center and earns $100,000 taxable income. A could take the total income for 5 years ($140,000), divide by 5 ($28,000), and pay tax on $28,000 for the past 5 years, less what A has already paid.


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