Basis
Basis means:
an amount usually representing the taxpayer's cost in acquiring an asset. It is used for a variety of tax purposes, including computation of gain or loss on the sale or exchange of the asset and depreciation with respect to the asset. Former IRC (check if this IRC provision is current here) §1012.
See also other Tax Terms and Definitions in U.S.A.
adjusted basis; carryover; recovery of basis; stepped-up basis.
Example of Basis:
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Collins purchases land for $10,000 and erects a store for $80,000. Her tax basis is $90,000. If she then sells the property for $95,000, she has a $5,000 gain. If she instead depreciates the property, the $80,000 cost basis of improvements is depreciable; the $10,000 basis of the land remains because land is not depreciable.
The amount of a taxpayer's investment in a property for tax purposes, adjusted for certain items.
See adjusted basis.
See Depreciation in the United States Encyclopedia of Law and Depreciation in the World Encyclopedia of Law.
Description and Definition of Basis
The amount you paid for an asset plus certain other costs that increase your basis – less depreciation previously taken. You need to know your “basis” to figure gain or loss on a sale.
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