Global Definitions Database

1031 Exchange

The exchange, under section 1031 of the Internal Revenue Code (IRC), of a real property held for investment or used in a trade or business, for a similar property; allows a property holder to defer capital gains associated with the sale of a property

401(a) Pension Plan

An employer-sponsored money-purchase retirement plan that allows dollar or percentage-based contributions from the employer, the employee, or both; the sponsoring employer establishes eligibility and the vesting schedule, while the employee can withdraw funds through a rollover to a different qualified retirement plan, a lump-sum payment, or an annuity.  

501(c)(3) Nonprofit Organization

A nonprofit organization approved for tax-exempt purposes under the Internal Revenue Code (IRC); typically the organization has a single major source of funding (usually gifts from one family or corporation rather than funding from many sources); 501(c)(3) organizations are either private foundations or public charities but are presumed to be private foundations unless described as public foundations in IRC Section 509(a)(1), (2), (3), or (4).  

509(a) Nonprofit Organizations

A nonprofit organization approved for tax-exempt purposes under the Internal Revenue Code (IRC) and whose activity is inherently public in nature; generally includes organizations that are churches, hospitals, qualified medical research organizations affiliated with hospitals, schools, colleges and universities, have an active program of fundraising and receive contributions from many sources, including the general public, governmental agencies, corporations, private foundations or other public charities, receive income from the conduct of activities in furtherance of the organization’s exempt purposes, or actively function in a supporting relationship to one or more existing public charities; qualifies under IRC section 509(a)(1), (2), (3), or (4) as an exemption to the 501(c)(3) private foundation definition.

704(b) Regulations

Internal Revenue Code (IRC) procedures relating to capital account maintenance rules and rules regarding a partnership's right to adjust capital accounts to reflect unrealized appreciation and depreciation in the value of partnership assets; provides that a partner's distributive share of income, gain, loss, deduction, or credit is determined in accordance with the partner's interest in the partnership if the partnership agreement does not provide as to the partner's distributive shares of these items, or the allocation to a partner of these items under the agreement does not have substantial economic effect; regulations under IRC section 704 provide extensive rules for determining whether allocations under an agreement have substantial economic effect.