1. C Corporation: A corporation that elects to be taxed as a corporation. The C corporation pays federal and state income taxes on earnings. When the earnings are distributed to the shareholders as dividends, this income is subject to another round of taxation (shareholder's income). Essentially, the C corporations' earnings are taxed twice. In contrast, the S corporation's earnings are taxed only once....
2. calendar year: A 12-month period beginning on January 1 st and ending on December 31 st .
3. call or call option: An option contract that gives the holder of the option the right (but not the obligation) to purchase at a predetermined price--called the "strike price", and obligates the writer to sell, a specified number of shares of the underlying stock at the given strike price, on or before the expiration date of the contract.
4. capital account: An account in which a proprietor's or partner's interest in a firm is recorded; it is increased by owner investments and net income and decreased by withdrawals and net losses.
5. capital expenditure: An expenditure that is recorded as an asset because it is expected to benefit more than the current period.
6. capital gain: The excess of the selling price over the cost basis when assets, such as securities and other personal and investment assets, are sold.
7. capital gains distribution: A distribution to the shareholders of a mutual fund out of profits from selling stocks or bonds, that is subject to capital gains taxes for the shareholders.
8. capital gains tax: The tax levied on profits from the sale of capital assets. A long-term capital gain, which is achieved once an asset is held for at least 12 months, is taxed at a maximum rate of 20% (taxpayers in 28% tax bracket) and 10% (taxpayers in 15% tax bracket). Assets held for less than 12 months are taxed at regular income tax levels, and, since January 1, 2000, assets held for at least five years are ta...
9. capital lease: A leasing transaction that is recorded as a purchase by the lessee.
10. capital stock: Stock authorized by a firm's charter and having par value, stated value, or no par value. The number and the value of issued shares are usually shown, together with the number of shares authorized, in the capital accounts section of the balance sheet.
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