Understanding Phantom Tax: What It Is and Why It Matters
When it comes to taxes, most people are familiar with paying taxes on income they’ve received. But imagine getting taxed on income that never landed in your bank account. That’s the reality for many individuals and businesses facing "phantom tax." In this blog, we’ll dive into what phantom tax is phantom tax how you can better understand and navigate its effects.
What Is Phantom Tax?
Phantom tax refers to taxes levied on “phantom income” – income that an individual or business is required to report for tax purposes, even though they haven’t received it in cash. This type of tax scenario is most common in certain investment, partnership, or real estate situations where income is accrued or deemed to exist on paper but isn’t distributed as cash.
How Does Phantom Tax Happen?
Phant...