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Finance Dictionary and Glossary of Investment Terms
tax basis
Definition 1.
Purchase price, including commissions and other expenses, used to determine capital gains and capital losses for tax purposes. This can be determined by several methods. For a purchased investment, the tax basis is the amount paid. If inherited, the tax basis is the value of the stock on the date of the original owner’s death. If received as a gift, the tax basis is the amount that was originally paid for the investment, unless the market value of the investment on the date the gift was given was lower. also called cost basis or basis.
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Definition 2.
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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