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Exemption

exemption n

1 : the act of exempting or state of being exempt
2 : one that exempts or is exempted: as
a : an amount of income exempted from taxation that may be deducted from adjusted gross income under the tax laws see also Internal Revenue Code in the Important Laws section compare deduction , exclusion , tax credit

de·pen·den·cy exemption
[də-pen-dən-sē-]
: an exemption that is allowed for each dependent who qualifies under the tax laws (as sections 151 and 152 of the Internal Revenue Code) NOTE: Under the federal income tax laws, the dependency exemption is allowed for each dependent whose gross income is less than the exemption or who is a child of the taxpayer and is under 19 or a student under 24.

per·son·al exemption
: an exemption that is allowed for the taxpayer or for the taxpayer and spouse if filing a joint return
b : the right created by federal and state laws to exempt specified types of property from a bankruptcy estate [precludes the debtor from using the s in the Bankruptcy Code]
;also
: a type of property that may be claimed as exempt see also Bankruptcy Code in the Important Laws section
c : homestead exemption


Source: Merriam-Webster's Dictionary of Law ©1996. Merriam-Webster, Incorporated. Published under license with Merriam-Webster, Incorporated.