Legal Definitions - hard dollars

Definition: Hard dollars refer to cash proceeds given to a seller or the part of an equity investment that is not deductible in the first year. This is in contrast to soft dollars, which are non-monetary benefits received by investors, such as research or other services.

Example 1: A company sells a piece of equipment for $10,000 in hard dollars. This means that the seller receives $10,000 in cash, rather than any other form of payment.

Example 2: An investor purchases $100,000 worth of stock in a company. Of this amount, $80,000 is considered hard dollars, meaning that it is not tax-deductible in the first year. The remaining $20,000 may be tax-deductible.

These examples illustrate the definition of hard dollars by showing how they represent actual cash payments or investments that are not immediately tax-deductible. Hard dollars are important to consider when making financial transactions, as they can impact the amount of taxes owed or the overall value of a sale or investment.