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An insult to someone's or something's intelligence. Derived from the medical term mentally incapacitated, this term came about due to how 'retard' is now a politically incorrect term to use for people with mental disabilities. Since terms that were used scientifically to define people that are mentally incapacitated, this new term is the new edition of 'retard.'
Person 1: Hey man you shouldn't use the word retard!
Person 2: Man, shut the fuck up, thats incapped.