Terminal Year

Definition of 'Terminal Year'


The year in which an individual dies, in the context of estate planning and taxation. Terminal year is used in estate planning and taxation because special tax rules and handling of income and assets may apply during the taxpayer's final year. In Canada, the terminal year refers to the portion of the calendar year during which the individual was living, from the first of the calendar year (January 1) up to the person's date of death.

Investopedia explains 'Terminal Year'


The terminal year is considered for tax and estate handling purposes. The deceased will be subject to tax liabilities on any income earned, or realized, during the terminal year, similarly to previous years of taxation. Certain deductions, income and assets may receive special tax treatment during the terminal year, as part of the estate taxation process. Certain tax forms are required to be filed for the terminal year of the decedent. In Canada and the United States, for example, the surviving spouse, executor or administrator of the estate must file a "final return" on behalf of the decedent.



comments powered by Disqus
Hot Definitions
  1. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  2. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  3. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  4. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  5. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  6. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
Trading Center