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GLOSSARY
Non-contestability clause
A non-contestability clause is legal verbiage that punishes a beneficiary for attempting to dispute a will. Such a clause may also be used in a life insurance policy to prohibit the insurance provider from denying payment due to an error on the application. Usually, the clause gives the insurance provider a limited time period for contesting a claim. Non-contestability clauses, particularly with respect to wills, don't always hold up in court.
Non-financial asset
Nondischargeable debt is an obligation that can't be wiped away by a bankruptcy court. Bankruptcy courts aren't authorized to remove a debtor's personal obligation for tax claims, child support claims, alimony claims, and other specified debt types.
Non-liquid asset
A property or possession that cannot easily be turned into cash.
Non-owner occupied
Nondischargeable debt is an obligation that can't be wiped away by a bankruptcy court. Bankruptcy courts aren't authorized to remove a debtor's personal obligation for tax claims, child support claims, alimony claims, and other specified debt types.
Non-qualified stock options
Non-qualified stock options, or NSOs, are a form of employee compensation that give the employees the right to purchase the employer's stock at a stated price. The non-qualified descriptor means that these options are not eligible for deferred tax treatment, and a tax event occurs in the year the employee exercises the option. The employee is taxed on the difference between the market price of the stock and the exercise price.
Non-qualifying investment
A non-qualifying investment is any asset purchased for financial gain that's not eligible for preferential tax treatment. Securities held within an IRA, for example, qualify for certain tax advantages, while a regular savings deposit does not.
Non-recurring closing costs
The fees paid at the close of a real estate settlement. The fees cover loan origination, the title insurance, escrow fees, and credit report management.
Non-revolving credit card
A non-revolving credit card is a credit account that requires payment of the full balance outstanding at the end of each billing period.
Nondischargeable debt
Nondischargeable debt is an obligation that can't be wiped away by a bankruptcy court. Bankruptcy courts aren't authorized to remove a debtor's personal obligation for tax claims, child support claims, alimony claims, and other specified debt types.
Nonpassive income
Nonpassive income describes earnings that are actively generated, such as wages and business profits where the taxpayer materially participates in the business operations. This compares to passive income, which is generated through investment vehicles. The classification of earnings as nonpassive or passive is important in the calculation of income taxes.
Nonpayroll withholding
Nonpassive income describes earnings that are actively generated, such as wages and business profits where the taxpayer materially participates in the business operations. This compares to passive income, which is generated through investment vehicles. The classification of earnings as nonpassive or passive is important in the calculation of income taxes.
Nonperforming asset
A nonperforming asset is a lending and leasing term used to describe an obligation that's not being paid as promised. While loans and leases are liabilities from the consumer's perspective, they're assets from the lender's perspective. When a debtor stops making payments as promised, the asset is no longer producing the desired results for the lender. The term can also be used more generally in reference to any asset that's not generating income.
Nonproductive loan
A nonproductive loan is a commercial debt obligation that doesn't enhance or improve the production levels of an economy. A loan that restructures a company's existing debt would be nonproductive, while a loan that finances the construction of a new manufacturing facility would be productive.
Nonrefundable credit
A nonrefundable credit reduces tax liability dollar-for-dollar, but can't reduce tax liability to less than zero. In other words, a nonrefundable tax credit might reduce one's tax liability to zero, but it would never result in the government owing money back to the taxpayer.
Nonresident alien
A nonresident alien is an individual who doesn't live in the U.S., and is not a citizen of the U.S. Nonresident aliens are taxed by the U.S. on income generated from U.S. sources.