The Cost of Living Adjustment (COLA) refers to an increase in payment amounts, such as rent or salaries, based on the rate of inflation. It ensures that individuals or entities maintain their purchasing power as the cost of living changes.
Ordinary income refers to any type of income that is taxed according to the standard income tax rates established by taxing authorities. This category includes wages, salaries, commissions, interest, and other types of income that do not receive special tax treatment like long-term capital gains.
