Definition of Taxable transaction

Taxable transaction

Any transaction that is not tax-free to the parties involved, such as a taxable acquisition.

Cash transaction

A transaction where exchange is immediate, as contrasted to a forward contract, which
calls for future delivery of an asset at an agreed-upon price.

Corporate taxable equivalent

Rate of return required on a par bond to produce the same after-tax yield to
maturity that the premium or discount bond quoted would.

Equivalent taxable yield

The yield that must be offered on a taxable bond issue to give the same after-tax
yield as a tax-exempt issue.

Going-private transactions

Publicly owned stock in a firm is replaced with complete equity ownership by a
private group. The shares are delisted from stock exchanges and can no longer be purchased in the open
markets.

Highly leveraged transaction (HLT)

Bank loan to a highly leveraged firm.

Intercompany transaction

transaction carried out between two units of the same corporation.

Round-trip transactions costs

Costs of completing a transaction, including commissions, market impact
costs, and taxes.

Structured arbitrage transaction

A self-funding, self-hedged series of transactions that usually utilize
mortgage securities as the primary assets.

Taxable acquisition

A merger or consolidation that is not a tax-fee acquisition. The selling shareholders are
treated as having sold their shares.

Taxable income

Gross income less a set of deductions.

Transaction exposure

Risk to a firm with known future cash flows in a foreign currency that arises from
possible changes in the exchange rate. Related:translation exposure.

Transactions costs

The time, effort, and money necessary, including such things as commission fees and the
cost of physically moving the asset from seller to buyer. Related: Round-trip transaction costs, Information
costs, search costs.

Transaction loan

A loan extended by a bank for a specific purpose. In contrast, lines of credit and revolving
credit agreements involve loans that can be used for various purposes.

Transaction demand (for money)

The need to accommodate a firm's expected cash transactions.

Transactions motive

A desire to hold cash for the purpose of conducting cash based transactions.

Transaction

The financial description of a business event.

Transaction

A business event that has a monetary impact on an entity’s financial statements,
and is recorded as an entry in its accounting records.

Roth IRA. An IRA account whose earnings are not taxable at all under certain

circumstances.

Realizable Revenue A revenue transaction where assets received in exchange for goods and

services are readily convertible into known amounts of cash or claims to cash.

Taxable Income

Income subject to income tax as reported on the tax return.

Picking transaction

Withdrawing parts or subassemblies from stock in order to
manufacture subassemblies or finished products.

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