Basis (or cost basis), as used in United States tax law, is the original cost of property, adjusted for factors such as depreciation. When a property is sold, the taxpayer pays/(saves) taxes on a capital gain/(loss) that equals the amount realized on the sale minus the sold property's basis.
Cost basis is needed because tax is due based on the gain in value of an asset. For example, if a person buys a rock for $20, and sells the same rock for $20, there is no tax, since there is no profit. If, however, that person buys a rock for $20 and then sells the same rock for $25, then there is a capital gain on the rock of $5, which is thus taxable. The purchase price of $20 is analogous to cost of sales.
Typically, capital gains tax is due only when an asset is sold. However, the rules for this are very complicated. If tax is paid because the value has increased, the new value will be the cost basis for any future tax.
Internal Revenue Service (IRS) Publication 551 contains the IRS's definition of basis: "Basis is the amount of your investment in property for tax purposes. Use the basis of property to figure depreciation, amortization, depletion, and casualty losses. Also, use it to figure gain or loss on the sale or other disposition of property."
Basis (or costbasis), as used in United States tax law, is the original cost of property, adjusted for factors such as depreciation. When a property...
Look up Basis or basis in Wiktionary, the free dictionary. Basis may refer to: Adjusted basis, the net cost of an asset after adjusting for various tax-related...
accounting model to the traditional historical cost accounting model. Under the historical costbasis of accounting, assets and liabilities are recorded...
book keeping records as an expense or asset costbasis. Opportunity cost, also referred to as economic cost is the value of the best alternative that was...
TCO, when incorporated in any financial benefit analysis, provides a costbasis for determining the total economic value of an investment. Examples include:...
of accounting models designed to correct problems arising from historical cost accounting in the presence of high inflation and hyperinflation. For example...
system on the basis of LCOE would cause the smaller system LCOE to increase, as the energy generation drops faster than the system cost.[clarification...
Accelerated Cost Recovery System (MACRS) is the current tax depreciation system in the United States. Under this system, the capitalized cost (basis) of tangible...
excess of the sale price over the costbasis of the asset. The taxpayer reduces the sale price and increases the costbasis (reducing the capital gain on...
2016-10-09. Retrieved 2017-04-22. Investors also refer to basis points when discussing the cost of mutual funds and exchange-traded funds. Typically, fund...
adjusted basis is the net cost of an asset after adjusting for various tax-related items. Adjusted Basis or Adjusted Tax Basis refers to the original cost or...
basis of an asset is generally its costbasis. Determining such cost may require allocations where multiple assets are acquired together. Tax basis may...
be profitable if the purchase price plus the net cost of carry is less than the futures price. Basis can be defined as the difference between the spot...
a transaction cost is a cost in making any economic trade when participating in a market. The idea that transactions form the basis of economic thinking...
the basis of exposing the ad to one thousand viewers or listeners. It is used in marketing as a benchmarking metric to calculate the relative cost of an...
In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered...
Radio and TV stations also sometimes offer unsold inventory on a cost per action basis, but this form of advertising is most often referred to as "per...
session of the new trading year, to restore the position (albeit at a lower costbasis). The term, therefore, derives its name from the late sale and early morning...
through direct hit. Its development has been stopped,[when?] mainly on the costbasis.[citation needed] ARMIGER was to feature an IR seeker, accurate Inertial...
standardized reports and consistent reporting visuals. "Basis of Estimate and estimate of uncertainty in cost estimate" (PDF). Ilcdcb.fnal.gov. Archived from...
different methods of electricity generation on a consistent basis. The more general term levelized cost of energy may include the costs of either electricity...
Total absorption costing (TAC) is a method of Accounting cost which entails the full cost of manufacturing or providing a service. TAC includes not just...
use the company's average cost of capital as a basis for the evaluation or cost of capital is a firm's cost of raising funds. However, for projects outside...
estate values are listed at market value rather than at historical cost or costbasis. Personal net worth is the difference between an individual's total...
transferor gains control. The corporation's basis in the asset then is the same as the transferor's. Costbasis Tax accounting IRC § 1015 IRC § 1012 IRC...
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