Success tax

Definition:

A 15% excise tax on "excess" distributions from tax-deferred retirement plans that was repealed by the Taxpayer Relief Act of 1997. In essence, the tax had penalized "successful" investors who accumulated large retirement accounts and took distributions that exceeded an annual limit deemed excessive by the tax code.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Negative convexity

A bond characteristic such that the price appreciation will be less than the price depreciation for a large change in yield of a given number of basis points. For example, a fixed-rate mortgage may... Read More

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