cost basis


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Cost basis

The original price of an asset, used to determine capital gains.

Cost Basis

1. The price of an asset for tax purposes. That is, one uses the cost basis of an asset to determine the capital gain or loss on an investment. For example, if an investor buys 1,000 shares of a stock for $10 per share and, at the end of the tax year, the stock is worth $15 per share, the cost basis is $10 per share. The investor uses this to determine that his/her capital gain on that stock for the tax year was $5 per share. It is important to note, however, that the cost basis is rarely the simple purchase price; it also includes applicable fees or commissions paid to the broker. This would increase the cost basis in the above example and thereby reduce the investor's capital gain.

2. The difference between the present price of a commodity and the futures price. See also: Spread.

cost basis

See basis.

Cost basis.

The cost basis is the original price of an asset -- usually the purchase price plus commissions. You use the cost basis to calculate capital gains and capital losses, depreciation, and return on investment.

If you inherit assets, such as stocks or real estate, your cost basis is the asset's value on the date the person who left it to you died (or the date on which his or her estate was valued). This new valuation is known as a step-up in basis.

For example, if you buy a stock at $20 a share and sell it for $50 a share, your cost basis is $20. If you sell, you owe capital gains tax on the $30-a-share profit.

If you inherit stock that was bought at $20 a share but valued at $50 a share when that person died, your cost basis would be $50 a share, and you'd owe no tax if you sold it at that price.

cost basis

The original cost of a property. After increases for capital improvements made over the years,and decreases for depreciation deductions or involuntary conversions such as condemnation, the number becomes one's adjusted basis.

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6 billion in cost basis related to decommissioning liabilities assumed by AmerGen in connection with its purchase of three nuclear power plants.
Broadridge clients to gain access to Scivantage Maxit, the market-leading cost basis solution with significant new functionality enhancements, including support for TARP III compliance
The NUA election allows you to withdraw stock from your retirement account and pay ordinary taxes on the cost basis only; then whenever you sell the position, the net unrealized appreciation between the cost basis and current sale price incurs favorable capital gains tax treatment.
When perusing your portfolio, it says to "look for a cost basis less than today's market price.
25 million, $750,000 in China Greenscape bringing its cost basis to $3.
If the taxpayer rolled over a prior home-sale gain under pre-1997 law, the taxpayer's initial cost basis must be reduced by this unrecognized gain.
Maintaining the historical cost basis would add significant record keeping problems for many taxpayers because they would have to, at best, sift through many years or decades of records, Provine said.
If the asset has to be replaced in the event of a claim, insure it on a replacement cost basis.
Capital gain: The profit that results when the proceeds from the sale of a security are higher than the security cost basis.
Consequently, a new cost basis is generated when an IMA is created.
If you did not reinvest any dividends or receive any capital gains, your taxable gain is $500 - your cost basis is $1,000 and your redemption amount is $1,500.
The effect of the election depends on whether the acquired corporation becomes a member of the group in a "qualifying cost basis transaction" or "nonqualifying transaction.