Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

TAX ACCOUNTING

The accounting practices that incorporate laws for taxation that is regulated by the IRS.

TAX AVOIDANCE

The lawful tax liability minimization that occurs from a sound financial plan. Tax avoidance is legal but tax evasion is not.

TAX CERTIFICATE

The proof of payment of taxes due on a property or income that is official.

RATCHET CLAUSE

1. Contracts: A stipulation where the contract rights of those involved is adjusted according to the formula agreed to as each stage is completed. 2. Utility Bills: A stipulation where the monthly

RATE AND TERM REFINANCE

To renegotiate the rate or term of a mortgage without changing the amount of said mortgage. This is a common way for borrowers to lock in a lower interest rate.

RATE BASE

The Base number used to compute the rate for taxation, a utility charge, a service or other rate.

RATE CARD

Printed list of rates charged by print and broadcast media. Rate cards are for direction only because the tangible charges vary greatly according to the bartering power of the promoter.

RATE DISCRIMINATION

This practice, now illegal by state insurance laws, involved charging different rates to insured people with similar attributes.

RATE INTERMEDIATION

The practice of borrowing money at lower, short-term interest rates and then lending this money through long term fixed rates, which are typically done at a higher rate of interest.

RATE LOCK DEPOSIT

The fee that a borrower pays to lock in their interest rate for the period while their mortgage application is processed. If they withdraw the application, they forfeit their deposit.

RATE LOCK FLOAT DOWN

Deposit a borrower pays to lock in their interest rate for the period while their mortgage application is processed. If interest rates drop, the borrower may choose the lower rate.

RATE MANUAL

The handbook or manual that contains all of the rates for coverage. This manual may contain other items including the guidelines to field underwriting, agent guidelines, and cash forfeiture values.

RATE OF CHANGE

Shown as a relative amount between changes in variables over a precise period. Stock traders depend on the swiftness of change of one stock price relative to another stocks price.

RATE OF DEPRECIATION

The rate in which the value of a capital asset drops due to certain variables such as the wear and tear, physical deterioration or the technological obsolescence of the asset.

RATE OF ECONOMIC GROWTH

The rate of economic growth is designed to determine the economic growth or decline over the course of the year.

RATE OF EXCHANGE

The rate of exchange is the monetary value of a determined amount of foreign currency on any given day.

RATE OF INFLATION

The rate of inflation is calculated by how low or high the prices of services and goods move all the way through the nation?s economy.

RATE OF NATURAL INCREASE/DECREASE

This rate is calculated by using the birth rate minus the death rate. It is a rate that is equivalent to the population increase or decrease without migration being factored in.

RATE OF RETURN RULE

Essential rule of investment that states that an investor should make an investment where the rate of return is larger than the prospective cost of the capital (time deposit interest rate).

RATE OF TURNOVER

This number, found by dividing the total sales revenue in a given period by the average inventory, is the number of times that a firm sells out of its merchandise.

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