Glossary of Terms beginning with A

If the IRS decides the corporation is holding more cash than it needs to operate, the assumption is the money is not being distributed in an attempt to avoid tax. This situation is most generally applicable to a Closely Held Business. 

The ACGA is a non-profit organization that annually publishes suggested gift annuity payout rates based on actuarial calculations and market conditions.

Actuarial, life expectancy, and other tables issued by the U.S. Treasury Department for use in calculating tax deductions for gifts made through trusts and by contract.

An individual appointed by a court to administer the estate of a person who dies without a will.

Living wills, Durable Power of Attorney for Healthcare, and Mental Health Directives that cover end of life and quality of life issues.

The Alternative Minimum Tax (AMT) attempts to ensure that anyone who benefits from certain tax advantages pays at least a minimum amount of tax. The AMT provides an alternative set of rules for calculating income tax. In general, these rules should determine the minimum amount of tax that someone with  income should be required to pay. If the individuals regular tax falls below this minimum, the requirement is to make up the difference by paying alternative minimum tax.

Congress continues to use the AMT as a negotiating tool when considering tax over hall. The  amounts at which AMT kicks in, in the past several years, have been determined by congress virtually year by year. And, generally, although the minimums have increased each year more and more tax payers are being impacted by AMT.

Annual gifts of a present interest in property worth up to $13,000 (2011) can be made to an any individual (need not be related) without generating federal gift tax. In addition to the $13,000, a qualified transfer to pay medical and educational expenses on behalf of a beneficiary can be made without incurring a gift tax. Example: tuition only (not room and board) and the payments must be made directly to the institution.

The person receiving annual or more frequent payments from a gift annuity.

See “Charitable Remainder Annuity Trust”

Also known as the IRS discount rate is part of the calculation used to determine the charitable deduction planned gifts, such as charitable remainder trusts and gift annuities. 

The difference between the adjusted basis of an asset and its current market value (assuming it has increased in value).

People with a substantial net worth are known as high net worth individuals, and form the prime market for wealth managers and investment counselors. Investors with a net worth (excluding their primary residence) of at least $1 million - either alone or together with their spouse - are considered as "accredited investors" by the Securities and Exchange Commission, for the purpose of investing in unregistered securities offerings.