A trust in which income-producing property is placed in the trust by the grantor andincome is distributed to the beneficiary over a specified time period. If the beneficiary is less than 14 years old, the income is taxed at the grantor's rate, otherwise it is taxed at the beneficiary's rate. At the end of the term, the property reverts to the grantor or the grantor's spouse.
Sunday, July 31, 2011
Balloon Maturity
A repayment schedule for an issue of bonds in which a large number of the bonds comedue at the same time, typically the final maturity date. This term applies only to bonds which do not have a sinking fund provision. A balloon maturity can put company cash flow under stress if adequate preparations are not made.
Term of the Day - Warren Buffett
The Chairman of Berkshire Hathaway, and arguably the greatest stock market investor of all time. An investor who chose to invest $10,000 in Berkshire Hathaway when Buffett took over in 1965 would have more than $20 million today. His forte is in identifyingundervalued companies, and he is well-known for taking a very long-term positions in companies he identifies as being good investment prospects. Buffett provides strongevidence that it is possible to consistently outperform the market.
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