Law Dictionary

tax benefit rule

noun

Legal Definition of tax benefit rule

  1. :  a tax rule requiring that if an amount (as of a loss) used as a deduction in a prior taxable year is recovered in a later year it must be included in the gross income for the later year to the extent of the original deduction

Additional Notes on tax benefit rule

If the amount of the loss was not taken as a deduction in the year the loss occurred, the recovered amount is not counted as income.


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