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GLOSSARY
Qualified adoption expenses
Qualified adoption expenses are costs associated with adopting a child for which the IRS provides a tax credit. Qualified expenses include things like attorney fees and adoption agency fees. Fees incurred while adopting a spouse's child do not qualify for the tax credit.
Qualified disclaimer
Qualified disclaimer, in the U.S., is a legal refusal to accept an ownership interest in property, usually for the purposes of avoiding an estate tax liability. Qualified disclaimers are governed by restrictions and requirements as set forth in the IRS Tax Reform Act of 1976.
Qualified dividend
A qualified dividend is a profit distribution to shareholders that can be taxed as a capital gain. This tax treatment is advantageous to the taxpayer since tax rates on capital gains are usually lower than income tax rates.
Qualified Medicare Beneficiary
Qualified Medicare Beneficiary, or QMB, is a program that covers certain Medicare deductibles including the Part A hospital deductible and the annual Part B deductible. The QMB program was established by the Medicare Catastrophic Coverage Act of 1988.
Qualified retirement plan
A qualified retirement plan, in the U.S., is an employer-established retirement savings program that meets IRS requirements, and therefore receives certain tax advantages. Pension programs, profit-sharing plans, and 401(k)s are qualified retirement plans.
Qualified Terminable Interest Property (QTIP) Trust
Qualified Terminable Interest Property Trust, also called a QTIP trust, is an estate planning tool that allows assets to be transferred from one spouse (the trust grantor) to another. Assets are transferred into the trust, and income from those assets can be directed to the spouse. If the trust grantor dies first, this arrangement makes the trust assets inaccessible to anyone else, should the surviving spouse remarry.
Qualified tuition plans (QTP)
This is a ratio of all fixed monthly expenses including PITI and other costs like students' loans, credit card payments and car loans to the total monthly income. This is calculated to determine the borrowers capacity.
Qualifying investment
A qualifying investment is an investment that can be made with pretax money because it fulfills stated requirements of the taxing authority. Examples include funds invested in qualified retirement plans and college savings plans.
Qualifying ratios
This is a ratio of all fixed monthly expenses including PITI and other costs like students' loans, credit card payments and car loans to the total monthly income. This is calculated to determine the borrowers capacity.
Qualifying widow/er
Qualifying widow/er is a tax filing status that can be used by an individual for two years following the death of a spouse. Qualifying widow/er status allows the surviving spouse to be taxed with the rates that apply to those who are married, filing jointly. To qualify for this status, the individual must not be remarried, and must have a dependent child living in the home.
Quick assets
Quick assets are items of value that can be easily converted to cash. These include short-term investments and accounts receivable.
Quick ratio
Quick ratio is the quotient of cash plus accounts receivable, divided by current liabilities. The ratio, also called the acid-test ratio, is used to assess a company's ability to meet its short-term obligations. A higher quick ratio means the company is more capable of meeting upcoming payment obligations with cash and accounts receivable.
Quitclaim deed
The document that transfers the ownership of a title to property and is filed with the government. It often is used among family members and can be used to clear up a gap in the chain of title or inheritance questions.