A qualified retirement plan for self-employed individuals or unincorporated businesses, also known as an HR 10 plan, which allows for tax-deferred contributions and potential tax deductions.
Kiting
[KAI-ting]
What is the definition of Kiting?
Kiting is a fraudulent banking practice involving the issuance of checks from an account without sufficient funds, with the expectation that deposits will clear before the checks are processed. This practice exploits the float time between the check being written and its clearance. Kiting can also refer to manipulating the face value of a check or inflating stock prices through deceptive trading strategies.
Using Kiting in an Example
An individual engaged in kiting by writing several checks for large amounts between two bank accounts he owned at different banks, hoping to create a false appearance of liquidity and to temporarily use funds that were not actually available.
Using Kiting in a sentence
The bank detected suspicious activity indicating kiting when they noticed repeated large transactions between accounts just before checks were due to clear.
Related Terms
Key Employee
In the context of top heavy plans, a key employee is defined as 1) an officer of the employer earning more than $130,000; 2) an individual who owns more than 5 percent of the employer; or 3) an individual who owns more than 1 percent of the employer and has compensation greater than $150,000.
Key Industry
An industry of primary importance to a nation's economy, often critical for its infrastructure, economic stability, and growth.
Key Person Insurance
A type of business-owned life insurance contract that is taken out on the lives of principal officers or essential employees of a company, providing guaranteed death benefits to the company and potentially accumulating a cash surrender value.
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