Tax Basis

Category: tax

The original value of an asset for tax purposes, usually the purchase price.

Basis is the "starting point." When you sell an asset (stock, house, business), your profit is the Sale Price minus your Basis. If you bought for $100 and sell for $150, your Basis is $100, and you pay tax on the $50 gain.

Common Examples

• We meticulously documented the tax basis of every asset in the portfolio to avoid overpaying capital gains tax upon liquidation.
• Adjusting the tax basis for home improvements allowed the owners to shield a significant portion of their profit from the final sale taxes.