Assessable Profit

DEFINITION of 'Assessable Profit'

Taxable income payable after accounting for allowable deductions. Assessable profit is a calculation used in tax law to determine an individual's taxable income based upon gains or losses on funds held in taxable investment accounts. It is taken net of items, such as expenses within an investment account, depreciation and charitable donations.

BREAKING DOWN 'Assessable Profit'

Assessable profits are an important tax measure in constituencies where tax payers may see large portions of taxable income come from investments held in taxable investment accounts. In Hong Kong, for instance, assessable profits are used to determine an individual's HK profits taxes payable. Such tax income is important for jurisdictions that rely on taxation for a bulk of their budgetary capital.

RELATED TERMS
  1. Net Income - NI

    1. A company's total earnings (or profit). Net income is calculated ...
  2. Tax Rate

    The percentage at which an individual or corporation is taxed. ...
  3. Tax Shelter

    A legal method of minimizing or decreasing an investor's taxable ...
  4. Tax Deduction

    A deduction from gross income that arises due to various types ...
  5. Taxable Gain

    A profit on the sale of an asset that is subject to taxation. ...
  6. Income Tax Payable

    A type of account in the current liabilities section of a company's ...
Related Articles
  1. Retirement

    Not All Retirement Accounts Should Be Tax-Deferred

    It may be better to leave your assets exposed to the tax man when you're saving to retire.
  2. Taxes

    Minimize Taxes With Asset Location

    Learn how to maximize your investment returns with this tax-minimization strategy.
  3. Taxes

    10 Sources Of Nontaxable Income

    Taxes are often a deterrent from investing and saving. These financial practices will bring you no tax grief.
  4. Retirement

    3 Tax-Reduction Strategies for High-Net-Worth Investors

    Learn about three tax strategies that reduce taxable income and minimize the share of taxes paid on employer-sponsored and individual investment accounts.
  5. Taxes

    Top 5 Ways to Reduce Your Taxable Income

    Reducing your taxable income is a great way to save money on the taxes you owe. Here are five ways to do it.
  6. Products and Investments

    How to Optimize Taxable Portfolios in Bear Markets

    A bear market presents an opportunity for financial advisors to optimize clients' taxable portfolios.
  7. Taxes

    Avoid the Social Security Tax Trap

    Government benefits can cost you big money! Know the income thresholds before you file.
  8. Taxes

    Explaining Progressive Tax

    A progressive tax is a levy in a tax system where the tax rate increases as the taxable base increases.
  9. Your Clients

    Year-end Tax Planning Strategies You Need to Know

    With the end of year fast approaching it's time to think of ways to curb your tax expenses using different investment vehicles.
  10. Retirement

    Top Tax Tips For Retirees

    Filing your taxes during retirement can be just as time consuming as when you were employed. We have some tips to help you out.
RELATED FAQS
  1. What assets are taxable and what assets are not taxable?

    Adjust your taxable income by understanding what assets the IRS taxes. Learn about legal strategies to lower tax liability ... Read Answer >>
  2. What is the difference between taxable income and gross income?

    Understand the basic differences between the terms gross income and taxable income, and what is included in the total of ... Read Answer >>
  3. What are some examples of different taxable events?

    Learn what a taxable event is and how it affects investors and taxpayers with examples of taxable events that can result ... Read Answer >>
  4. Are my 2015 unrealized capital gains and dividends on mutual funds taxable income?

  5. Are gross sales and taxable gross sales the same thing?

    Learn the difference between gross sales and taxable gross sales and how these terms relate to the profit and tax liability ... Read Answer >>
  6. What is the difference between a state income tax and a federal income tax?

    Learn the difference between state income tax and federal income tax based on tax rates, deductions, tax credits and taxable ... Read Answer >>
Hot Definitions
  1. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  2. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  3. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  4. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  5. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  6. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
Trading Center