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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Marital Deduction


Synonyms:credit, marital allowance, marriage write-off, tax rebate
Filed Under: financial-banking, taxation
Tags: banking, taxes
 

Definition of marital deduction

marital deduction
1. For estate tax and gift tax purposes, a deduction that allows you to transfer assets to your spouse tax-free.

Related Terms and Acronyms:

  • alimony   Monthly payments received by an ex-spouse. Payments must be received continuously for one year to be counted toward qualifying income for a loan.
  • charitable gift annuity (CGA)   A method to facilitate charitable giving whereby an individual transfers assets to a charity in exchange for a tax deduction and lifetime retirement income payments from the charity.
      ➥  A form of planned giving.
  • Child Tax Credit (CTC)   A tax break for those who claim eligible dependent children on their tax returns.
      ➥  See Canada Child Tax Benefit (CCTB).
  • circuit breaker   A tax credit that reduces property taxes for the elderly and permanently disabled. The credit is dependent on the amount of income earned which means the more you make, the lower the credit.
  • common law marriage (CLM)   To be recognized as being married without foregoing a matrimonial ceremony.
  • deductions   Expenses the government allows you to subtract from your taxable income. If you have taxable income of $31,000 and deductions of $4,000, then you would figure how much tax you owe on the difference -- $27,000.
  • income-splitting   A financial strategy used for tax purposes to reduce the overall tax burden on a family. Income is shifted from one family member to another who is in a lower tax bracket, so the income is taxed at the lower rate to save the family money.
  • reconciliation   Checking all bank account papers to make sure that the bank's records and your records agree.
  • tax deduction   An expense that governments allow you to subtract from your income before computing your income tax.

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