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Tax credit

A direct reduction in the amount of income tax a person owes. Unlike a deduction, which lowers taxable income, a credit directly reduces the tax bill dollar-for-dollar.

Internal Revenue Code of 1986

The official compilation of all federal tax laws in the United States.

Primary residence

The main home where a person lives for most of the year.

Non-primary residence / Secondary residence

A home, such as a vacation home, that is not a person's main place of living.

PFAS

A group of man-made chemicals (per- and polyfluoroalkyl substances) that have been used in many products for decades, known for their resistance to heat, oil, stains, grease, and water. They are sometimes called 'forever chemicals' because they break down very slowly in the environment and human body.

PFOAS

A specific type of PFAS chemical (perfluorooctanoic acid) that has been widely studied for its health effects and environmental persistence.

Basis Adjustment

A change to the cost of an asset for tax purposes. If a tax credit is received for an expenditure, the cost basis of the property is reduced by the amount of the credit, which can affect future tax calculations if the property is sold.