Estate and inheritance are often referred to as death taxes. The name “death tax” was coined years ago to put a negative spin on the federal estate tax. But although they’re both related to death, the inheritance tax and the estate tax are actually quite different. It’s important to clearly understand what each tax is and what property it’s imposed on. What Is a Death Tax? The phrase “death tax” is commonly used by the media to refer to an estate tax, an inheritance tax, or both....

Definition and Examples of Defined Contribution Plans Defined contribution plans are retirement savings plans that both employees and employers can contribute to. They are different from defined benefit plans like pensions because the employee must choose how the plan is invested, which determines what the end benefit will be. Defined contribution plans are popular among employers. They are offered for many full-time employees in the form of a 401(k) plan (used by most private companies) or a 403(b) plan (used by tax-exempt organizations)....

So what do you do if you buy the wrong life insurance product? In some cases, it’s easy to fix. As we discuss below, you can potentially change an existing policy, replace it with a different one, or cancel an unneeded policy. But be aware of the timing; it often pays to make changes as soon as possible. Common Life Insurance Shopping Mistakes It’s ideal to get the perfect solution on your first attempt, but sometimes that doesn’t happen....

Benefits of BDCs With smaller companies, BDCs provide them with access to the capital they need for growth that they might not be able to get elsewhere. BDCs can also help distressed companies improve their financial stability. The U.S. Congress originally created BDCs in 1980 in order to add another source of stimulation to the economy. BDCs were designed to create jobs by providing investment and management support to small- and mid-size companies....

Each city requires that a business register with the local government for taxation purposes, and acquiring a business tax receipt is one of the first steps. This receipt grants permission to the business owner to sell goods and services in that locality. In fact, many cities and counties require you to have a business tax receipt before you even open your doors. Alternate names: Local business tax receipt (LBTR)Business tax certificate (BTC)Gross receipts...

The average time a home remains on the market in a buyer’s market is longer than it is during a seller’s market. Homes spent an average of 25 days on the market before going under contract during a seller’s market that occurred in 2020. This was down from 30 days on the market in 2019, according to Zillow. How a Buyer’s Market Works Those looking to buy a home are better positioned to get what they want when there are more homes on the market than there are buyers....

Conventional loans may or may not follow government-sponsored entity (GSE) guidelines and can further be categorized into two types: conforming and non-conforming. Alternate names: Conventional mortgage loans; Non-government loansAcronym: Non-GSE loans Conforming loans—those that conform to GSE guidelines—are limited to $647,200 in most counties or up to $970,800 in high-cost counties (in 2022). This number is generally adjusted annually by the Federal Housing Finance Agency. In addition, the minimum credit score for a good interest rate is typically higher than those required for government loans....

Alternate name: Credit bureau Banks and lenders look at a consumer or business’s credit report and score to determine creditworthiness. When you apply for a loan, the information in your credit report determines whether or not you’re approved, as well as the types of interest rates you receive. There are three main credit reporting agencies in the U.S. that track consumer credit: Equifax, Experian, and TransUnion. How a Credit Reporting Agency Works If you’ve taken out a loan or applied for a credit card recently, your lending information was reported to at least one of the major credit bureaus....

A stock would be delisted if the issuing company were to fail to meet the minimum standards set by the exchange it was listed on. For example, if ABC Company was listed on the NASDAQ Global Select Market for three years, but it didn’t meet the income requirements for the last two years, NASDAQ could delist that company. How Does Delisting a Stock Work? Stock exchanges have rules and standards that companies must meet to be listed....

A draw schedule is an important part of any major construction project, especially a home build. Keep reading to learn how draw schedules work and why it’s important to have them for your project. Definition and Examples of a Draw Schedule A draw schedule in a construction project outlines when the builder will receive payments—also known as draws—throughout the building process. When a bank is financing the project, the draw schedule is an agreement between the bank, the builder, and the customer....

Foreclosures occur when a homeowner with a mortgage fails to make payments to the lender, and the lender then sells the home to recoup their losses. “A judicial foreclosure is a foreclosure action that has to be initiated by court action and the court oversees the foreclosure process,” Emil Samman, partner at Romer Debbas in New York, N.Y., told The Balance in an email. “The foreclosing party would need to file a summons and complaint for the foreclosure....

A jumbo CD comes with higher minimum balance requirements. Since you’re depositing more money, you’ll often earn a higher interest rate. However, the exact amount you earn in interest depends on where you open the CD, your term length, and the amount you deposited. For example, a 60-month jumbo CD from Latino Credit Union has a minimum $100,000 deposit and yields 2.35% interest. In comparison, a six-month jumbo CD from the same credit union has an interest rate of ....

HealthHealth historyFamily’s health historyLifestyleHabitsOccupation They also may access your driving records, prescription history, and credit report to help determine which risk class to put you in. Once this information is reviewed, the underwriter creates your risk profile and places you in the corresponding health or rate class. The classification impacts your eligibility for coverage and the premiums you’ll pay for your policy if you are approved. Age and gender will also have an impact on your premiums....

In this article, we review how a LIRP works, and we explore some of the pros and cons of a retirement strategy that relies on life insurance. We’ll also evaluate other ways to fund your retirement in a tax-aware manner. Definition and Examples of a Life Insurance Retirement Plan (LIRP) A LIRP is a retirement strategy that uses the cash value of permanent life insurance policies, such as whole life and universal life insurance, to hold retirement assets....

Alternate definition: A loan constant is the amount of interest and principal paid to a lender compared with the total loan amount.Alternate name: Mortgage constant Figuring out your loan constant helps you determine what you’ll pay annually for that loan. Investors often look at the loan constant to determine whether a property is worth investing in. How a Loan Constant Works Borrowers can use loan constant tables and calculators to figure out the total cash they’ll have to pay annually to cover the interest and principal on a loan....

The concept of private property is central to the market economy, because it gives owners the right to sell their goods. Competition is also an important factor, because it affects supply and demand. In contrast to a market economy, in a command economy, a central government (or even a single ruler) decides how many goods should be produced and services provided, and sets their prices. Market economies are not controlled by a central authority such as a government, and are instead based on voluntary exchange....

The agreement must also be unconditional. This means that there’s no other promise or order involved besides the payment of the funds. The instrument is “negotiable” in that the person holding it can choose to transfer it to someone else through endorsement. You’ll find negotiable instruments classified as either drafts or notes. You’d use a draft to order someone to be paid a certain amount of cash. On the other hand, a note would be used to promise the payment of money, such as through a loan....

Alternate name: New fund offeringAcronym: NFO How a New Fund Offer Works An NFO works in a couple of different ways, depending on the type of fund. When a new fund is created, it goes to an investment or asset management company to launch. Some new funds have more marketing and buzz compared to others, depending on the fund. As a potential investor in the new fund, you’ll get to review the types of securities in the fund, the fund manager, and any company information....

Alternate names: doubtful loans, troubled loans, sour loans Usually, the lender puts it on a cash basis and can no longer add interest to the loan, thereby losing revenue. At this point, the loan is classified as non-performing and has been reported to the top credit reporting bureaus. Here’s an example of a nonaccrual loan. Let’s say you default on a mortgage loan by more than 90 days and have no collateral to secure it....

xavierarnau / Getty Images While many private companies are small, family-owned businesses, they may also include much larger corporations. Well-known companies that remain private include Koch Industries, Publix Super Markets, and Fidelity Investments. Alternate name: Privately held company, closely held company How Do Private Companies Work? A private company doesn’t issue public shares. Instead, it’s owned by an individual, a family, or a group of private investors. Two important characteristics of private companies are how they raise capital and their reporting requirements....