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07 Taxes: Basis




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This article is from the US Taxes FAQ, by Wayne Ross wayner@metronet.com.

07 Taxes: Basis

Basis is the dollar amount attributed by the tax rules to
some item of property. Although similar to cost or carrying value
in its usage, it is mainly a tax creation. Most often one sees
basis used in connection with some other words, i.e. adjusted
basis, depreciable basis, gain or loss basis, substituted basis,
etc.

Usually a gain on the sale of property is the difference
between the proceeds of the sale, and the seller's basis in the
property sold.

The determination of basis can vary depending upon the
character of the property, from whom and under what circumstances
it was obtained, etc. You should refer to the tax publications
above or consult your tax advisor for specific questions.


 

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