Basis is the cost of acquiring property and sets the taxable gain on sale.
Evidence
One of the reasons why is the tax concept called basis, which typically refers to the cost of acquiring property. When I buy property, my basis is whatever I paid for it, and that basis will be used to measure the taxable gain or loss when I sell it. But if I don’t sell that property during my lifetime, leaving it for my children or another relative to inherit, there is a different basis rule that will help them keep more of it tax-free. — Dorothy A. Brown, The Whiteness of Wealth, 472
Categorization
Category: Definitional Content
- DEFINE: Defines ‘basis,’ the technical term needed to explain the inherited-property tax advantage.