Tax Glossary

An individual who meets one of the following criteria: (1) owned more than 5% of the capital or profits in a business at any time during the current or prior year, or (2) received compensation during the prior year that was more than an annual predetermined amount and in the top 20% compared to other employees' compensation.

An activity that is carried on for personal pleasure or recreation and is not entered into with the intention of making a profit.

The length of time investment property has been held. Generally, the time between the date of purchase (or acquisition) and the date of sale (or disposition). The holding period for stocks and securities begins the day after the trade date and ends the day of sale.

Any interest an individual pays on a loan secured by their home (either their main home or a second home). The loan may be a mortgage to buy their home, a second mortgage, a line of credit, or a home equity loan.

Ordinary and usual services done in and around the taxpayer's home that are necessary to run their home, including the services of a housekeeper, maid, or cook, but not including the services of a chauffer, bartender, or gardener.