An air waybill (AWB) is a document that accompanies goods shipped by an international air courier to provide detailed information about the shipment and allow it to be tracked. The bill has multiple copies so that each party involved in the shipment can document it. An air waybill (AWB), also known as an air consignment note, is a type of bill of lading. However, an AWB serves a similar function to ocean bills of lading, but an AWB is issued in non-negotiable form, meaning there’s less protection with an AWB versus bills of lading.
Understanding an Air Waybill (AWB)
An air waybill (AWB) serves as a receipt of goods by an airline (the carrier), as well as a contract of carriage between the shipper and the carrier. It’s a legal agreement that’s enforceable by law. The AWB becomes an enforceable contract when the shipper (or shipper’s agent) and carrier (or carrier’s agent) both sign the document.
The airway bill will also contain the shipper’s name and address, consignee’s name and address, three-letter origin airport code, three letter destination airport code, declared shipment value for customs, number of pieces, gross weight, a description of the goods, and any special instructions (e.g., “perishable”).
An AWB also contains the conditions of the contract that describe the carrier’s terms and conditions, such as its liability limits and claims procedures, a description of the goods, and applicable charges.
An airway bill is a standard form distributed by the International Air Transport Association (IATA).
Key Takeaways
An airway bill or AWB is a document that accompanies goods shipped by an international courier, which allow for tracking.
It serves as a receipt of goods by an airline, as well as a contract of carriage between the shipper and the carrier. It’s a legal agreement that’s enforceable by law.
AWBs are non-negotiable instruments and must include the shipper’s name and address, consignee’s name and address, destination airport, and value of contents, among other things.
Air Waybill (AWB) vs. Bill of Landing
AWBs are unlike other bills of lading, in that they are non-negotiable instruments, meaning that it does not specify on which flight the shipment will be sent, or when it will reach its destination. Bills of lading are legal documents between the shipper of goods and the carrier, detailing the type, quantity, and destination of the goods being carried.
Bills of lading also act as a receipt of shipment when the goods are delivered at a predetermined destination. This document accompanies the goods and is signed by authorized representatives of the shipper, the carrier, and the recipient. However, unlike a bill of landing, an air waybill (AWB) is non-negotiable. Being non-negotiable, the AWB is a contract just for transportation and does not cover the merchandise value.
Requirements for an Air Waybill
The International Air Transport Association (IATA) designs and distributes air waybills. There are two types of AWBs—an airline-specific one and a neutral one. Each airline AWB must include the carrier’s name, head office address, logo, and air waybill number. Neutral air waybills have the same layout and format as airline AWBs; they just aren’t prepopulated.
An air waybill has 11 numbers and came with eight copies of varying colors. With the Multilateral Electronic Air Waybill Resolution 672, paper air waybills are no longer required. Dubbed the e-AWB, it’s been in use since 2010 and became the default contract for all air cargo shipments on enabled trade lines as of 2019.
Some airlines no longer produce paper air waybills, only allowing access to electronic air waybills.
The term “adverse possession” refers to a legal principle that grants title to someone who resides on or is in possession of another person’s land. The property’s title is granted to the possessor as long as certain conditions are met including whether they infringe on the rights of the actual owner and whether they are in continuous possession of the property. Adverse possession is sometimes called squatter’s rights, although squatter’s rights are a colloquial reference to the idea rather than a recorded law.
Key Takeaways
Adverse possession is the legal process whereby a non-owner occupant of a piece of land gains title and ownership of that land after a certain period of time.
The claimant, or disseisor, must demonstrate that several criteria have been met before the court will allow their claim.
Requirements may include continuous use, a takeover of the land, and exclusive use.
Also known colloquially as squatters’ rights or homesteading, the law may also be applied to other properties such as intellectual or digital/virtual property.
There are some measures landowners can take to avoid adverse possession.
Understanding Adverse Possession
As mentioned above, adverse possession is a legal situation that occurs when one party is granted title to another person’s property by taking possession of it. This can happen intentionally or unintentionally with or without the property owner’s knowledge.
In cases of intentional adverse possession, a trespasser or squatter—someone who occupies another person’s land illegally—knowingly comes on to another person’s land to live on it and/or take it over. In other cases, adverse possession may be unintentional. For example, a homeowner may build a fence separating their yard without realizing they’ve crossed over and encroached on their neighbor’s property line. In either case, the adverse possessor—also referred to as the disseisor—can lay claim to that property. And if the claimant is successful in proving adverse possession, they are not required to pay the owner for the land.
A disseisor who successfully proves adverse possession is not required to pay the owner for the land.
Requirements to Prove Adverse Possession
The requirements to prove adverse possession tend to vary between jurisdictions. In many states, proof of payment for the taxes on a property and a deed is essentially required for the claimant to be successful. Each state has a time period during which the landowner of record can invalidate the claim at any time. For example, if the state threshold is 20 years and the landlord paints or pays for other maintenance on the house in question in the 19th year, then the claimant will have a difficult time proving adverse possession. That said, landowners are advised to remove the possibility of adverse possession as soon as possible by having signed agreements for any use of an owned property.
To successfully claim land under adverse possession, the claimant must demonstrate that his or her occupation of the land meets the following requirements:
Continuous use: Under this condition, the adverse possessor must show they’ve been in continuous and uninterrupted possession of the property in question.
Hostile and adverse occupation of the property: Although this doesn’t mean that the disseisor uses force to take the land, they must show there is no existing agreement or license from the landowner such as a written easement, lease, or rent agreement.
Open and notorious possession: The person seeking adverse possession must occupy a property in a manner that is open, notorious, and obvious. The true owner is not required, however, to be aware of the occupation.
Actual possession: The possessor must actively possess the property for the state’s predetermined statutory period, which may vary from three to 30 years. Possession may involve maintaining the land and—depending on state law—paying taxes.
Exclusive use: The property is used solely by the disseisor, excluding any others from using it as well.
Adverse possession has been proposed as a possible solution to discourage abuses of intellectual property rights like cybersquatting, excessive copyright, and patent trolling. Applying adverse possession to intellectual property as well as physical property would force the abusers to put more resources into actively using their portfolio of trademarks, patents, and so on, rather than just sitting on them and waiting for the actual innovators to step in their territory.
How to Prevent Adverse Possession
If you are a landowner, you can prevent a trespasser from gaining property ownership by taking some easy measures:
Identify and mark your property boundaries. Inspect your land regularly for signs of trespassers. You may want to use “no trespassing” signs and block entrances with gates. Although many states will not find a “no trespassing” sign sufficient to prevent an adverse possession claim, it’s a good way to deter trespassers.
Offer to rent the property to the trespasser. With a proper rental agreement in place, the trespasser cannot claim adverse possession.
Grant written permission to someone to use your land, and make sure you get their written acknowledgment.
Act fast. In the event of trespassing, you must act before the trespasser has been on your land for the period of time detailed by your jurisdiction, in order to make a successful case.
Hire a lawyer as soon as you detect signs of trespassing on your land. You might need to file a lawsuit to expel the trespasser, or a court order to remove an unwanted structure from your land.
Adverse Possession vs. Homesteading
Adverse possession is similar to homesteading in practice. In homesteading, government-owned land or property with no clear owner on record is granted to new owners provided they are using and improving it. If a homesteader doesn’t use the land, they can lose it. Adverse possession can operate in a similar manner by freeing up land with an unclear title for productive use.
Of course, adverse possession can also be abused in ways homesteading cannot. If there is an informal easement between two farms where one farmer’s fence has an acre of the neighbors’ land in it, for example, the farmer using it can claim adverse possession to essentially bite off that chunk of land if there is no written easement agreement.
What Are the 5 Requirements of Adverse Possession?
Although the requirements for adverse possession may vary significantly between jurisdictions, the following are the typical requirements that need to be met:
The possession of the property must be continuous and uninterrupted.
The occupation must be hostile and adverse to the interests of the true owner, and take place without their consent.
The person seeking adverse possession must occupy a property in a manner that is open, notorious, and obvious.
Possession of the property must continue for the state’s predetermined statutory period, which may vary from three to 30 years.
The property must be occupied exclusively by the person seeking adverse possession.
What States Allow Adverse Possession?
Although all states allow adverse possession, the requirements can vary widely from state to state. The main differences involve the length of possession, the payment of taxes, and the presence of a document that claims to establish ownership (such as a deed). In general terms, states in the East do not require additional documentation, but they may require the payment of taxes on the property. States in the West tend to allow shorter periods of possession but have some additional requirements, such as the payment of taxes or a deed.
What Is the Time Limit on Adverse Possession?
The time limit varies by jurisdiction, ranging from three years (Arizona) to 30 years (Louisiana). The average time threshold is 10-12 years.
Who Can Claim Adverse Possession?
Any person in possession of land owned by someone else may claim adverse possession and acquire valid title to it under, as long as certain requirements are met, like being in possession for a sufficient period of time or paying taxes on the property. These requirements vary by jurisdiction.
What Is the American Opportunity Tax Credit (AOTC)?
The American Opportunity Tax Credit (AOTC) is a tax credit for qualified education expenses associated with the first four years of a student’s postsecondary education. The maximum annual credit is $2,500 per eligible student. The student, someone claiming the student as a dependent, or a spouse making postsecondary education payments can claim the AOTC on their tax return.
Key Takeaways
The American Opportunity Tax Credit (AOTC) helps offset the costs of postsecondary education for students or their parents (if the student is a dependent).
The AOTC allows an annual $2,500 tax credit for qualified tuition expenses, school fees, and course materials.
Room and board, medical costs, transportation, and insurance do not qualify, nor do qualified expenses paid for with 529 plan funds.
To claim the full credit, your modified adjusted gross income (MAGI) must be $80,000 or less ($160,000 if married filing jointly).
Understanding the American Opportunity Tax Credit (AOTC)
With the AOTC, a household with a qualifying student can receive a maximum $2,500 tax credit per year for the first four years of higher education. Parents claiming a dependent child who is a full-time student ages 19 to 24 can claim an additional $500 Child Tax Credit.
The AOTC helps with educational costs such as tuition and other expenses related to a student’s coursework. Eligible students (or their parents) can claim 100% of the first $2,000 spent on school expenses and 25% of the next $2,000. This comes out to a maximum credit of $2,500: (100% × $2,000) + (25% × $2,000).
The American Opportunity Tax Credit is partially refundable, which means that it could provide a refund even if your tax liability is $0.
In general, tax credits are refundable, nonrefundable, or partially refundable. Up to $1,000 (40%) of the AOTC is refundable, making it a partially refundable tax credit. So, if the credit brings your tax liability to $0, you can receive 40% of your eligible credit (up to $1,000) as a refund.
AOTC Eligibility Requirements
Like other tax credits, you must meet specific eligibility requirements to claim the AOTC.
Who Can Claim the AOTC?
To claim the AOTC on your tax return, you must meet all three of these requirements:
You pay qualified education expenses for higher education.
You pay the education expenses for an eligible student.
The eligible student is either you, your spouse, or a dependent whom you claim on your tax return.
Additionally, you must receive Internal Revenue Service (IRS) Form 1098-T to claim the credit. Here’s an example of a completed form:
A student is eligible for the AOTC only if they meet certain requirements. Specifically, the student must:
Be taking courses toward a degree or some other recognized education qualification
Be enrolled at least part time for at least one academic period beginning in the tax year
Not have finished the first four years of higher education at the beginning of the tax year
Not have claimed the AOTC (or the former Hope credit) for more than four tax years
Not have a felony drug conviction at the end of the tax year
Academic periods can be quarters, trimesters, semesters, or summer school sessions. If the school doesn’t have academic terms, you can treat the payment period as an academic period.
Which Expenses Qualify for the AOTC?
For the purposes of the AOTC, qualified education expenses include tuition and some related costs required for attending an eligible educational institution. An eligible educational institution is any accredited public, nonprofit, or private college, university, vocational school, or other postsecondary educational institution. Related expenses include:
Student activity fees paid to the school as a condition of enrollment or attendance
Books, supplies, and equipment needed for classes, whether or not you buy them from the school
Insurance, medical expenses (including student health fees), room and board, transportation, and living expenses do not count as qualified education expenses.
You can pay for qualified education expenses with student loans. However, you can’t claim the credit if you paid for expenses with scholarships, grants, employer-provided assistance, or funds from a 529 savings plan.
What Are the Income Limits for the AOTC?
To claim the full credit, your modified adjusted gross income (MAGI) must be $80,000 or less ($160,000 if married filing jointly). The credit begins to phase out above these limits and disappears entirely if your MAGI is above $90,000 ($180,000 for married filing jointly).
Income Limits for the American Opportunity Tax Credit
Single
Married Filing Jointly
Full Credit
$80,000 or less
$160,000 or less
Partial Credit
More than $80,000 but less than $90,000
More than $160,000 but less than $180,000
No Credit
More than $90,000
More than $180,000
Source: Internal Revenue Service
AOTC vs. Lifetime Learning Credit
The AOTC and the Lifetime Learning Credit (LLC) are popular tax breaks that people with educational expenses can claim on their annual tax returns. While similar, the LLC and the AOTC differ in several ways.
With the LLC, you can claim up to 20% of the first $10,000 of qualifying expenses ($2,000). The LLC is not limited to students pursuing a degree or studying at least part time. Instead, it covers a broader group of students—including part-time, full-time, undergraduate, graduate, and courses for skill development. Finally, the LLC is nonrefundable, meaning that once your tax bill hits zero, you won’t receive a refund on any credit balance.
American Opportunity Tax Credit (AOTC) vs. Lifetime Learning Credit (LLC)
Criteria
AOTC
LLC
Maximum Benefit
Up to $2,500 per student
Up to $2,000 per return
Credit Type
Partially refundable (40% of credit)
Nonrefundable
MAGI Limit (Single)
$90,000
$80,000
MAGI Limit (Married Filing Jointly)
$180,000
$160,000
# of Tax Years Available
Four per student
Unlimited
Program Requirement
Degree seeking
N/A
Course Load
At least half time for at least one academic period
At least one course
Qualified Expenses
Tuition, required fees, and course materials
Tuition and fees
Felony Drug Conviction
Not allowed
N/A
Source: Internal Revenue Service
If you’re eligible for both the AOTC and the LLC, be sure to assess your individual situation to determine which tax credit provides the greater benefit. The partial refundability of the AOTC can be an important factor. Of course, some taxpayers may only qualify for the LLC, making the decision easy.
You can claim the AOTC and the LLC (as well as the deduction for tuition and fees) on the same tax return—but not for the same student or the same qualified expenses.
Other Tax Breaks for Education
Federal and state governments support higher education expenses through various tax credits, tax deductions, and tax-advantaged savings plans. Each of these programs can help lower your income tax liability and make education more affordable. Beyond the AOTC and the LLC, be sure to claim any education-related tax deductions for which you may be eligible, including those for:
Savings plans can also help with higher education expenses. These are tax-advantaged accounts that allow you to save—and pay for—education expenses. Two popular programs include:
Thanks to the Tax Cuts and Jobs Act, you can now use up to $10,000 of 529 plan distributions to pay for K–12 costs per beneficiary each year. Previously, you could use the funds only for college and other postsecondary education expenses.
AOTC Example
Rosa is a full-time undergraduate college student at a four-year institution. She also works for a law firm. Her parents have a substantial 529 savings account in place, but it doesn’t cover all of Rosa’s expenses. Rosa also has a student loan with deferred payments and interest until after graduation.
Rosa and her family pay her tuition with student loans and use funds from a 529 plan to cover room and board. Rosa receives her annual 1098-T statement and, since she is working, she plans to take the AOTC herself. She is eligible for both the AOTC and the LLC, but she chooses the AOTC because it provides a larger credit and is partially refundable.
Rosa paid her tuition with a student loan, which is allowable for the AOTC. The AOTC helps alleviate any tax that she owes and she also gets a partial refund. Rosa doesn’t owe anything on her loans until after she graduates. The money distributed from the 529 was tax-free because it was used for room and board, which is a qualified 529 expense.
How Do I Claim the American Opportunity Tax Credit (AOTC)?
To claim the American Opportunity Tax Credit (AOTC), complete Form 8863 and submit it with your Form 1040 or 1040-SR when filing your annual income tax return. Enter the nonrefundable part of the credit on Schedule 3 of your 1040 or 1040-SR, line 3. The refundable portion of the credit goes on line 29 of the 1040 or 1040-SR.
Can I Claim the AOTC and the Lifetime Learning Credit?
Yes. You can claim the AOTC and the Lifetime Learning Credit (LLC) on the same tax return. However, you can’t claim both credits for the same student or the same expenses during a single tax year.
Can I Claim the AOTC if I Get a Grant?
Yes. However, you need to subtract that amount from your qualified education expenses before claiming the tax credit. So, if you have $5,000 in costs and a $4,000 grant, you would be able to claim $1,000 of qualified education expenses for the AOTC. For the purposes of the AOTC, grants include:
Tax-free parts of scholarships and fellowships
Pell Grants and other need-based education grants
Employer-provided assistance
Veterans’ educational assistance
Any other tax-free payments that you receive for educational aid (excluding gifts and inheritances)
An auditor is a person authorized to review and verify the accuracy of financial records and ensure that companies comply with tax laws. They protect businesses from fraud, point out discrepancies in accounting methods and, on occasion, work on a consultancy basis, helping organizations to spot ways to boost operational efficiency. Auditors work in various capacities within different industries.
Key Takeaways
The main duty of an auditor is to determine whether financial statements follow generally accepted accounting principles (GAAP).
The Securities and Exchange Commission (SEC) requires all public companies to conduct regular reviews by external auditors, in compliance with official auditing procedures.
There are several different types of auditors, including those hired to work in-house for companies and those who work for an outside audit firm.
The final judgment of an audit report can be either qualified or unqualified.
Understanding an Auditor
Auditors assess financial operations and ensure that organizations are run efficiently. They are tasked with tracking cash flow from beginning to end and verifying that an organization’s funds are properly accounted for.
In the case of public companies, the main duty of an auditor is to determine whether financial statements follow generally accepted accounting principles (GAAP). To meet this requirement, auditors inspect accounting data, financial records, and operational aspects of a business and take detailed notes on each step of the process, known as an audit trail.
Once complete, the auditor’s findings are presented in a report that appears as a preface in financial statements. Separate, private reports may also be issued to company management and regulatory authorities as well.
The Securities and Exchange Commission (SEC) demands that the books of all public companies are regularly examined by external, independent auditors, in compliance with official auditing procedures. Official procedures are established by the International Auditing and Assurance Standards Board (IAASB), a committee of the International Federation of Accountants (IFAC).
Unqualified Opinion vs. Qualified Opinion
Auditor reports are usually accompanied by an unqualified opinion. These statements confirm that the company’s financial statements conform to GAAP, without providing judgment or an interpretation.
When an auditor is unable to give an unqualified opinion, they will issue a qualified opinion, a statement suggesting that the information provided is limited in scope and/or the company being audited has not maintained GAAP accounting principles.
Auditors assure potential investors that a company’s finances are in order and accurate, as well as provide a clear picture of a company’s worth to help investors make informed decisions.
Types of Auditors
Internal auditors are hired by organizations to provide in-house, independent, and objective evaluations of financial and operational business activities, including corporate governance. They report their findings, including tips on how to better run the business, back to senior management.
External auditorsusually work in conjunction with government agencies. They are tasked with providing an objective, public opinion concerning the organization’s financial statements and whether they fairly and accurately represent the organization’s financial position.
Government auditors maintain and examine records of government agencies and of private businesses or individuals performing activities subject to government regulations or taxation. Auditors employed through the government ensure revenues are received and spent according to laws and regulations. They detect embezzlement and fraud, analyze agency accounting controls, and evaluate risk management.
Forensic auditors specialize in crime and are used by law enforcement organizations.
Auditor Qualifications
External auditors working for public accounting firms require a Certified Public Accountant (CPA) license, a professional certification awarded by the American Institute of Certified Public Accountants. In addition to this certification, these auditors also need to obtain state CPA certification. Requirements vary, although most states do demand a CPA designation and two years of professional work experience in public accounting.
Qualifications for internal auditors are less rigorous. Internal auditors are encouraged to get CPA accreditation, although it is not always mandatory. Instead, a bachelor’s degree in subjects such as finance and other business disciplines, together with appropriate experience and skills, are often acceptable.
Special Considerations
Auditors are not responsible for transactions that occur after the date of their reports. Moreover, they are not necessarily required to detect all instances of fraud or financial misrepresentation; that responsibility primarily lies with an organization’s management team.
Audits are mainly designed to determine whether a company’s financial statements are “reasonably stated.” In other words, this means that audits do not always cover enough ground to identify cases of fraud. In short, a clean audit offers no guarantee that an organization’s accounting is completely above board.
