Money that is for baked item (3)
I believe the answer is:
pie
'baked item' is the definition.
Although both the answer and definition are singular nouns, I cannot see how one could define the other.
'money that is' is the wordplay.
'money' becomes 'p' ().
'that is' becomes 'ie' (short for Latin 'id est', 'that is').
'p'+'ie'='PIE'
'for' acts as a link.
Can you help me to learn more?
(Other definitions for pie that I've seen before include "In the sky, this dish is impractical" , "Cooked food" , "In the sky, it's an unrealistic prospect" , "Bird; pastry" , "what to cook for dinner?" .)