tax basis
Asset's original value
Tax basis is the original cost or value assigned to an asset for tax purposes, used to calculate gains or losses when the asset is sold.
Basis includes the purchase price plus certain costs like improvements or fees: Her tax basis in the house was $300,000, so when she sold it for $450,000, she owed taxes on the $150,000 gain.
Basis can be adjusted upward or downward by various events—depreciation reduces it, while capital improvements increase it.
- costRequired payment amount
- carryoverAmount brought forward
- disallowedOfficially not permitted
- capital lossSelling asset below purchase price
- reacquisitionGaining back ownership
capital gains · securities · capital improvements · amortization · salvage value · residual value · recapture · holding period · 1099 · purchase price · depreciation · unrealized · inherited · appraisal value · taxable · writedown · IRS · transfer
tax basisfair market value
Objective exchange price
market value · current value · appraised value · sale price · replacement cost