term:

Tax Benefit Rule

tax benefit rule n

: a tax rule requiring that if an amount (as of a loss) used as a deduction in a prior taxable year is recovered in a later year it must be included in the gross income for the later year to the extent of the original deduction NOTE: If the amount of the loss was not taken as a deduction in the year the loss occurred, the recovered amount is not counted as income.

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