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transaction legal definition
noun
- An act of carrying out some form of business between two persons.
- A business agreement or exchange.
- 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.
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