A person whose spouse has died within the tax year and who may file a joint tax return for that year. Additionally, the surviving spouse can file joint returns for the next two years if they remain unmarried and maintain a household as the principal residence for a dependent child.
Sinking Fund
[SING-king fund]
What is the definition of Sinking Fund?
A sinking fund is a separate account where money is regularly accumulated and specifically earmarked for the redemption of debt securities or preferred stock, helping ensure funds are available for these future liabilities.
Using Sinking Fund in an Example
A corporation issues bonds with a 10-year maturity and establishes a sinking fund to gather enough capital over time to repay the bondholders at maturity. Each year, a portion of the company's earnings is set aside into this fund, dedicated solely to the redemption of these bonds.
Using Sinking Fund in a sentence
The finance manager explained that they would need to increase the annual contribution to the sinking fund to meet the upcoming debt obligations on schedule.
Related Terms
Swap
A financial contract in which two parties agree to exchange streams of payments over a specified period, based on different indices such as interest rates, foreign exchange rates, or equity indices, applied to a notional amount. Swaps typically do not involve the exchange of principal.
Deferred.com Resources
Recent Posts
