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transaction definition - legal

n

  1. An act of carrying out some form of business between two persons.
  2. A business agreement or exchange.
  3. Any activity in which two or more persons are involved.
closed transaction
A transaction that is complete, so that the actual realized gain may be calculated for tax purposes.
open transaction
A transaction in which all the events have not yet occurred, and so the computation of taxes on that transaction is not yet possible.
sham transaction
A transaction that will be disregarded for tax purposes because it has no real substance.

Webster's New World Law Dictionary Copyright © 2006 by Wiley Publishing, Inc., Hoboken, New Jersey.
Used by arrangement with John Wiley & Sons, Inc.

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