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.

References in periodicals archive ?
The Department had invited the Expression of Interest (EoI) from million-plus cities, smart cities, State/UT capitals and cities from special category states for submission of proposal for deployment of electric buses on operational cost basis.
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It also mandated that available-for-sale debt securities must be assessed individually for credit losses when fair value is less than the amortized cost basis.
He added that POF's were fulfilling 90% ammunition requirements of Pakistan Armed Forces on cost to cost basis. Chairman further informed that POF's exported its products to different countries and have earned about 8.2 billion rupees during financial years 2017-18.
If she waits to inherit it, she'll receive it with a new stepped-up cost basis, the value at the time of your death.
According to Reuters, the car maker focused more on reaching a "more sustainable" long term cost basis, not just finding one-time reductions for this quarter.
This 132KV GIS grid station consists of 11 kanals of land and the construction of grid station is 100% cost basis by DHA.
Section 13521(a) of the TCJA allows the seller of a policy to include all premiums paid in cost basis when calculating taxes due on a setdement transaction.
Acquired less than 18 months prior to the current loan, the clients were looking to secure a non-recourse cash out loan as close to their total cost basis as possible.
When investors purchase cryptocurrency, they establish their cost basis in the coin.
Each year, more investments are moved to the "reported" category for cost basis reporting, which means cost basis and proceeds details are sent to the IRS from your custodian.