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Excise Tax

A tax imposed on the manufacture, sale, or use of certain goods and services, or on certain transactions, rather than on income or property value. In this case, it's a tax on the acquisition of homes by specific entities.

Hedge Fund Taxpayer

A partnership, corporation, or real estate investment trust (REIT) that manages pooled funds from investors, has $50 million or more in assets, and acts as a financial advisor to those investors, with some exceptions like non-profits or builders.

Single-Family Residence

Any residential property that contains 1 to 4 living units, like a detached house, duplex, or a small apartment building.

Acquisition Indebtedness

Debt taken out to buy, build, or substantially improve a home. In this bill, it refers to debt incurred by a hedge fund taxpayer to acquire a single-family residence.

Depreciation

An accounting method to spread the cost of a tangible asset over its useful life. For rental properties, it allows owners to deduct a portion of the property's cost each year as a business expense, even if the property's value is increasing.

Internal Revenue Code of 1986

The official compilation of federal tax laws in the United States, as amended over time.