Annuity. Any vehicle that provides a fixed annual payment to a recipient. A Charitable Remainder Annuity Trust provides annual payments in a fixed dollar amount to the non-charity beneficiaries, regardless of the actual income of the Trust.
Appreciated Assets. Assets the value of which has increased since you acquired them.
Bargain Element. The difference between the exercise price and the market value of the stock.
Capital Gain Income. Income representing the net profits earned on liquidated property which is held for one or more years.
Cost Basis. The tax basis made up of the acquisition price, reduced by any depreciation deductions and increased by any improvements.
Exercise Price. The price per share of a participants grant to purchase the stock.
Low Yield (vs. High Yield.) An investment which produces a low rate of return or low earnings.
Ordinary Income. Income received on earned income as well as from short term investments not qualifying for long term capital gains treatment, which income is taxed at a rate higher than that applied to long-term capital gains.
Stock Options. The right to purchase a number of shares of company stock at a stipulated price within a fixed period of time.
Unitrust. A trust that provides a varying annual payment amount. A Charitable Remainder Unitrust pays a percentage of the value of the Trust each year to its beneficiaries. The annual payment varies depending on the value of the Trust, which typically increases every year due to the Trust investment holdings.