Basis
Also called: tax basis · cost basis
A tax measure of investment in property used in calculating gain, loss, depreciation and other tax items.
What it means in practice.
Basis often begins with cost but can be adjusted by improvements, depreciation and other tax events. In a like-kind exchange, replacement-property basis is generally determined under carryover rules rather than simply resetting to purchase price.
Why it matters.
Basis is essential to estimating gain and future depreciation.
Additional notes.
Basis often begins with cost but can be adjusted by improvements, depreciation and other tax events. In a like-kind exchange, replacement-property basis is generally determined under carryover rules rather than simply resetting to purchase price.
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