A tax term that refers to the original or acquisition value of a property, used to determine the amount of tax that will be assessed upon the sale of the capital asset or property.  The basis is deducted from the sales price of the property when it is sold to determine the profit or loss.  For example, if you were to buy one share of Microsoft stock for $100 you would have a tax basis of $100.  If you sold the stock for $110, you would have $10 of gain (which is the $110 sales price minus your $100 tax basis).  You would have to pay a federal income tax on the $10 capital gain. 
back to top