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.

RELATED TERMS
  1. Tax Liability

    The total amount of tax that an entity is legally obligated to ...
  2. Assessable Profit

    Taxable income payable after accounting for allowable deductions. ...
  3. Tax Shelter

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

    The percentage at which an individual or corporation is taxed. ...
  5. Taxable Gain

    A profit on the sale of an asset that is subject to taxation. ...
  6. Termination Event

    An occurrence that will cause all or part of a swap agreement ...
Related Articles
  1. Taxes

    Ten Things That You Might Not Know Are Taxable

    When you file your taxes this year make sure that you have claimed all taxable income. Here are ten things that you might not know are taxable
  2. 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.
  3. Investing Basics

    3 Tax Implications of Dividend Stocks

    Dividend paying companies are attractive in a low interest rate environment, but income seeking investors have to be careful of the potential tax hit.
  4. Taxes

    What is the Effective Tax Rate?

    The effective tax rate is the average rate at which an individual or corporation is taxed per year.
  5. Economics

    What is a Tax Liability?

    Tax liability is the amount of money a person or entity owes to the government as the result of a taxable event.
  6. Taxes

    Explaining Taxable Income

    Taxable income is the net of gross income and allowable deductions.
  7. 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.
  8. Mutual Funds & ETFs

    How Mutual Funds Are Taxed in the U.S.

    A look at how mutual funds are taxed and how investors can be more tax efficient.
  9. Fundamental Analysis

    7 Ways to Create a Tax-Efficient Portfolio

    Taxes may be a necessary evil, but that doesn't mean they can't be reduced. Here's a host of smart moves today's investors can make.
  10. Taxes

    Explaining Progressive Tax

    A progressive tax is a levy in a tax system where the tax rate increases as the taxable base increases.
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. Are my 2015 unrealized capital gains and dividends on mutual funds taxable income?

  3. 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 >>
  4. 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 >>
  5. 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 >>
  6. What is the difference between gross income and taxable income?

    Understanding common tax terms including gross income and taxable income can help individuals navigate tax accounting in ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. 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 ...
  5. White Squire

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

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center