Financial Terms Glossary - R
rate of return
The annual return on an investment, stated as a percentage. For example, six dollars earned in one year on one hundred dollars gives a 6% rate of return.
See also yield.
ready cash items
Cash, certificates of deposit, stocks, bonds, and other investments that have clear market value and can be turned into cash in very short order.
real estate investment trust (REIT)
A company that specializes in real estate investments. A REIT must meet strict ownership, investment, and income distribution tests to qualify for tax treatment as a REIT. REIT's allow individual investors to diversify their real estate investments.
A designation reserved for those who are affiliated with the National Association of Realtors.
A substantial restructuring of the stock and/or bonds of a corporation by amending the articles of incorporation or by merger with a parent or subsidiary.
An agreement between two insurance companies to share the risk taken on by one company for insurance policies where the risk of loss is substantial.
The tax law does not allow tax losses between certain related taxpayers. The prohibited relationship can be that of family members, a shareholder and his or her corporation, or the cross ownership of two or more legal entities such as corporations and partnerships.
The one entitled to an interest in property after the termination of a life estate. For example, a surviving spouse may have the use of real estate until her death, at which time the remainder interest passes to her child (the remainderman).
See also life tenant.
Residential property includes houses, condos, trailers, and boats if they have sleeping, eating, and bathroom facilities. If you have more than one residence, only one will quality for the preferred tax treatment as your principal residence. Your principal residence will be the place where you spent the greatest part of the year.
A balance sheet account that shows the accumulated earnings of a corporation from its inception, minus total dividends distributed.
reviewed financial statements
See compiled financial statements and audit.
A source of funds for older people who have equity in their homes and need additional retirement money. The homeowner gets monthly payments that add to the mortgage balance. When the homeowner dies, sells the home, or moves out, the mortgage is paid off from the proceeds of the home sale. A reverse mortgage allows older people to remain in their homes while borrowing against the equity.
A trust that can be altered or terminated by the grantor (the person who established it).
A Roth IRA is treated like a traditional IRA except for several important differences. Contributions to a Roth are never tax-deductible. Qualified withdrawals from a Roth are not taxable. Contact us for assistance in determining whether or not a Roth is better for you than a traditional IRA.