Browse:  A B C D E F G H I J K L M N O P Q R S T U V W Y Z
     
Enter a Legal Term

Search the Definitions

basis

n. the original cost of an asset to be used to determine the amount of capital gain tax upon its sale. An "adjusted basis" includes improvements, expenses, and damages between the time the original basis (price) is established and transfer (sale) of the asset. "Stepped up basis" means that the original basis of an asset (especially real property) will be stepped up to current value at the time of the death of the owner, and thus keep down capital gain taxes if the beneficiary of the dead person sells the asset. Example: Daniel Oldboy buys a house for $30,000, and when he dies the place is worth $250,000. When his son and heir receives the property, the son can sell it for $250,000 with no capital gains tax, but if Dad had sold it before his death there would have been capital gains on $220,000. It can be more complicated than this simple example with assets jointly held with a spouse, exchanges of property, and other variations which require professional assistance.

See also: adjusted basis 

From the Law.com Newswire



The People's Law Dictionary by Gerald and Kathleen Hill Publisher Fine Communications

FEATURED FIRMS

Flager & Associates
1210 Northbrook Dr
Feasterville-Trevose, PA 19053
215-953-5200
flagerlaw.com
O'Malley & Langan PC
201 Franklin Ave
Scranton, PA 18503
570-344-2667
omalleylangan.com
Smith Law Office
5003 Horizons Dr #200
Columbus, OH 43220
614-846-1700
sestriallaw.com

Presented By Big Voodoo