Tax Basis

Tax basis

In the context of finance, the original cost of an asset less depreciation that is used to determine gains or losses for tax purposes.
In the context of investments, the price of a stock or bond plus the broker's commission.

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tax basis

See basis.

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Tax Basis

1. The cost of an asset less depreciation. This is used when calculating one's tax liability related to that asset.

2. The all-in cost of a security when it is bought. That is, it is the price of the security plus any applicable fees. This is the price against which any capital gains or losses are calculated for tax purposes. For example, if the tax basis for a stock is $5 per share and the investor sells it for $7, then the capital gain for which one is liable is $2 per share. It is also called the cost basis or simply the basis.