Basis: Turning a Common Client Question into New Business

How a simple conversation opens the door to a host of new opportunity.

By Barry J. Friedman, CPA

Basis seems like a simple concept, but as with so many tax issues, it can become complicated quickly. This is especially true after recent tax reform.

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First, let’s start with what “basis” means. Clients need to understand that basis is usually what you paid for an asset. According to the IRS, a capital gain or loss is the difference between your basis and the amount you get when you sell an asset. So, if you sell an asset that is worth more than you paid for it, you will have to pay taxes on the gain.