Carryover Basis


DEFINITION of 'Carryover Basis'

A method for determining the tax basis of an asset when it is transferred from one individual to another. Carryover basis is often used when property is given as a gift to someone else and is the method for determining the basis for future tax payments.

BREAKING DOWN 'Carryover Basis'

The carryover basis is commonly used in estate planning when transferring property to future heirs. It determines the value of the property at the beginning of the period and is used to determine the tax rate that must be paid on capital gains when the asset is sold.

  1. Heir

    HeirA person who inherits some or all of the estate of another ...
  2. Cost Basis

    1. The original value of an asset for tax purposes (usually the ...
  3. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  4. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
  5. Estate Planning

    The collection of preparation tasks that serve to manage an individual's ...
  6. Gift Tax

    A federal tax applied to an individual giving anything of value ...
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