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Definition for

Basis

For income tax purposes, the value used to determine if a profit or loss is made when property is sold. Often, the basis is the original price paid for the property. For example, if a house is purchased at $200,000, the tax basis is $200,000. If the house is later sold for $350,000, the taxable profit is $150,000 (Sales price $350,000 minus the basis $200,000).

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