Econ 138A Ch 17 Definitions

creative assets

Copyrights; literary, musical, or artistic compositions; letters or memoranda; or similar assets.

education savings bonds

Qualified Series EE savings bonds that can be redeemed tax-free to pay for certain education expenses.

qualified education loan

Any debt incurred to pay higher education expenses.

American Opportunity Credit

An individual tax credit based on the cost of tuition, fees, and course materials paid during the first four years of postsecondary education.

Lifetime Learning Credit

An individual tax credit based on 20 percent of the cost of tuition, fees, and course materials.

Coverdell education savings account

An investment account through which individuals can save for education expenses on a tax-exempt basis.

qualified tuition program

A savings program sponsored by a state or private educational institution in which individuals can invest to pay future college expenses.

federally declared disaster

A destructive event such as a hurricane or wildfire that is determined by the U.S. president to warrant federal assistance by agencies such as the Federal Emergency Management Agency (FEMA). For tax purposes, the amount of casualty loss equals the lesser of the tax basis in the property or the decrease in value from the casualty. The cost of repairs to the property is acceptable as evidence of the decrease in value if the taxpayer shows that the repairs are necessary to restore the property to its condition immediately before the casualty.

hobby loss

Excess of expenses over revenue from a personal activity not engaged in for profit.

imputed income from owner-occupied housing

The nontaxable economic benefit (fair rental value) derived by the owner of a home.

qualified residence interest

Interest paid on acquisition debt allowed as an itemized deduction.

acquisition debt

Debt incurred to acquire, construct, or substantially improve a personal residence. The debt must be secured by the residence.

principal residence

The home in which an individual resides for most of the year and considers his permanent address.

vacation home

A personal residence other than the owner’s principal residence.