Tax Basis
What is it? The original cost you paid for an investment (plus expenses) that must be reported to the IRS when you sell the investment. The basis is used for calculating capital gains or losses. For example, if you bought a stock for $1,000 two years ago and sold it today for $1,500, your income tax return would show a basis of $1,000 and a taxable capital gains profit of $500.Added By: Caroline
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