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Houston Mortgage > Glossary >
Mortgage > T 1-10
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Tax deduction
A tax deduction is an amount that the IRS allows you to subtract from your income before computing your income tax. If you have taxable income of $30,000 and deductions of $3,000, then you would figure how much tax you owe on the difference -- $27,000. People may take a standard deduction on federal income taxes, an amount established each year by the IRS for each filing status. Or, if they have a greater amount of deductions than the standard amount, they can deduct them by itemizing expenses on Schedule A. Typical itemized deductions include mortgage interest, some loan points, property taxes and state income taxes. Some other items -- such as alimony payments, moving expenses, deductible IRA and Keogh contributions -- may be deducted directly on the long Form 1040.
Tax lien
A claim, or obstacle, to the sale of property because of unpaid taxes. The property's title can't be transferred until liens are paid.
Tax sale
A government sale of property to recover unpaid taxes.
Tax shelter
An investment that is planned to result in tax-favored treatment. The IRS has placed restrictions on tax shelters where the principal purpose of the activity appears to be the avoidance or evasion of taxes or where the activity might result in more deductible expenses than the investors have at risk.
Tax stamps
A levy by a state or local government on the change of ownership of real estate.
Tear-down condition
A house that is bought so it can be razed to make room for a newer house; usually located in a spectacular setting.
Teaser rate
Often called the introductory rate, it is the below-market interest rate offered to entice customers to switch credit cards or lenders.
Ten-Year Treasury Constant Maturity
An index published by the Federal Reserve Board based on the average yield of a range of Treasury securities, all adjusted to the equivalent of a 10-year maturity. Yields on Treasury securities at constant maturity are determined by the U.S. Treasury from the daily yield curve. That is based on the closing market-bid yields on actively traded Treasury securities in the over-the-counter market.
Tenancy by the entirety
Ownership by spouses in which each spouse owns an undivided interest in the entire property. When one spouse dies, the other has title to the entire property.
Tenants in common
Ownership by two or more people in which each person owns an undivided interest in the entire property and all have equal rights to use the property. When one tenant in common dies, that person's interest may be sold, mortgaged or transferred to another in a will.
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