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 common reasons for governments to implement tariffs?

    A tariff is a tax imposed by a governing authority on goods or services entering or leaving the country and is typically ... Read Full Answer >>
  3. What are some of the arguments in favor of a value-added tax (VAT)?

    A value-added tax (VAT) offers several advantages over an income tax or traditional sales tax. It raises needed government ... Read Full Answer >>
  4. How does a company derecognize a deferred tax liability?

    Under U.S. generally accepted accounting principles, or GAAP, deferred tax positions must be derecognized during the first ... Read Full Answer >>
  5. How is compound interest taxed?

    Compound interest is money that is earned and added to a principal balance and then earns additional interest. Adding interest ... Read Full Answer >>
  6. According to the law of supply and demand, what is the effect of an increase or decrease ...

    Standard economic analysis shows that taxes of any form, including income taxes, tend to cause deadweight loss in the market. ... 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

    How The IRS Catches Tax Cheats & Liars

    When civil and criminal penalties don't deter people from skipping out on their taxes, the IRS has other tools it can use.
  9. Economics

    The Field So Far: US 2016 Presidential Candidates

    Over the past several months, there has been a lot of speculation as to who will make a run at the Republican and Democratic nominations.
  10. Taxes

    Tips on Charitable Contributions: Limits and Taxes

    An overview of the limits and tax deductions of charitable donations.

You May Also Like

Hot Definitions
  1. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  2. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  3. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  4. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  5. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  6. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
Trading Center