IRS Publication 551 - Basis Of Assets

AAA

DEFINITION of 'IRS Publication 551 - Basis Of Assets'

A document published by the Internal Revenue Service (IRS) that outlines how to determine the cost basis for investments, real estate and business assets. The basis is used to determine what gain or loss is realized from a sale, and represents the cost of the investment or property. It is also used to determine depreciation and amortization for a piece of property.

INVESTOPEDIA EXPLAINS 'IRS Publication 551 - Basis Of Assets'

The basis for a piece of property is typically the purchase cost, however the basis may increase over time if the owner makes improvements to the property. For investments, such as stocks and bonds, the cost basis also includes trading fees. More information on establishing the cost basis for investments can be found in IRS Publication 550.

RELATED TERMS
  1. Amortization

    1. The paying off of debt in regular installments over a period ...
  2. IRS Publication 550

    A document published by the Internal Revenue Service (IRS) that ...
  3. Real Property

    Any property that is attached directly to land, as well as the ...
  4. Cost Basis

    1. The original value of an asset for tax purposes (usually the ...
  5. Appreciation

    An increase in the value of an asset over time. The increase ...
  6. Unstated Interest Paid

    The percentage of interest the U.S. Internal Revenue Service ...
RELATED FAQS
  1. Can real estate be depreciated?

    Investors are able to depreciate rental real estate and track the expenses of generating income to save money on their federal ... Read Full Answer >>
  2. What are some examples of a deferred tax liability?

    In the United States, laws allow companies to maintain two separate sets of books for financial and tax purposes. Because ... Read Full Answer >>
  3. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    After a prolonged period of corporate scandals involving large public companies from 2000 to 2002, the Sarbanes-Oxley Act ... Read Full Answer >>
  4. How is a corporate bond taxed?

    A corporate bond is taxed through the interest earned on the bond, through capital gains or losses earned in the early sale ... Read Full Answer >>
  5. What are some of the advantages and disadvantages of absorption costing?

    Companies must choose between using absorption costing or variable costing in their accounting systems. There are advantages ... Read Full Answer >>
  6. What taxes will I pay if I win a lot of money while gambling in Las Vegas?

    Every year, thousands of people travel to gambling hot spots, such as the Nevada cities of Las Vegas and Reno, with the hope ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Dividend Facts You May Not Know

    Discover the issues that complicate these payouts for investors.
  2. Retirement

    Avoiding Too Much Tax On Your Distributions

    IRA assets can't be taxed twice - find out how to avoid paying the second time around.
  3. Taxes

    Will Your Home Sale Leave You With Tax Shock?

    Learn how the newest tax laws apply to the proceeds you earn.
  4. Taxes

    A Tax Primer For Homeowners

    Go beyond interest and find out how mortgage points affect your taxable income.
  5. Taxes

    The Basics Of REIT Taxation

    The unique tax advantages offered by these investments can translate into superior yields.
  6. Taxes

    Using Tax Lots: A Way To Minimize Taxes

    The method of identifying cost basis can help you to get the most out of reduced tax rates.
  7. Taxes

    Avoid Capital Gains Tax On Your Home Sale

    If you have property to sell and want to avoid capital gains tax, a Section 1031 exchange may be the answer.
  8. Taxes

    What's an Audit?

    An audit is an objective examination of accounting records that makes sure the records are a fair and accurate representation of the transactions they claim to represent.
  9. Taxes

    What is Adjusted Gross Income?

    Adjusted gross income (AGI) is a term from the Internal Revenue Code. AGI is used to determine a person’s income taxes due.
  10. Bonds & Fixed Income

    Abenomics Vs. Quantitative Easing: Which Works Best?

    Abenomics and QE are versions of extraordinary stimulus measures initiated by the Japanese government and the U.S government, respectively.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center