Taxable Event

DEFINITION of 'Taxable Event'

Any event or transaction that results in a tax consequence for the party who executes the event. Common examples of taxable events for investors include receiving interest and dividends, selling securities for a gain and exercising options.

BREAKING DOWN 'Taxable Event'

Investors should focus on limiting their taxable events, or at least minimizing high tax rate events while maximizing low tax rate ones.

Holding on to profitable stocks for more than a year (to eliminate short-term capital gains) is one of the easiest ways to minimize the effects of taxable events.

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RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. Are Social Security benefits taxable?

    Find out what rules and guidelines govern if your social security benefits are taxable. Learn how to determine if you are ... Read Answer >>
  4. What are the best free online calculators for calculating my taxable income?

    Find out where to locate the best online calculators to determine your taxable income and why it is important to know this ... Read Answer >>
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    Understanding common tax terms including gross income and taxable income can help individuals navigate tax accounting in ... Read Answer >>
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