basis(redirected from basis pedunculi cerebri)
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Related to basis pedunculi cerebri: interpeduncular fossa, middle cerebellar peduncle, cerebellar peduncles
The minimum, fundamental constituents, foundation, or support of a thing or a system without which the thing or system would cease to exist. In accounting, the value assigned to an asset that is sold or transferred so that it can be determined whether a gain or loss has resulted from the transaction. The amount that property is estimated to be worth at the time it is purchased, acquired, and received for tax purposes.
In a simple case, the basis of property for tax purposes under the Internal Revenue Code is the purchase price of a piece of property. For example, if a taxpayer purchases a parcel of land for $500,000, and no deductions apply to that parcel of land, the taxpayer's basis is $500,000. If the taxpayer later sells the property for $550,000, the amount of gain realized by the transaction is the sale price ($550,000) less the adjusted basis ($500,000), or $50,000.
Where a taxpayer is allowed to depreciate property with a limited useful life, such as an automobile used primarily for business purposes, the taxpayer's adjusted basis is reduced. Assume a taxpayer purchases an automobile for $30,000, and then claims deductions for $5,000. The adjusted basis of the automobile is then reduced to $25,000. When the taxpayer sells the automobile for $26,000, the amount of gain realized is $1,000 (the sale price of $26,000 minus the adjusted basis of $25,000).
Bankman, Joseph et al. 2002. Federal Income Tax: Examples and Explanations. New York: Aspen Law & Business.
Hudson, David M., and Stephen A. Lind. 2002. Federal Income Taxation. St. Paul, Minn.: West.
n. the original cost of an asset to be used to determine the amount of capital gain tax upon its sale. An "adjusted basis" includes improvements, expenses, and damages between the time the original basis (price) is established and transfer (sale) of the asset. "Stepped up basis" means that the original basis of an asset (especially real property) will be stepped up to current value at the time of the death of the owner, and thus keep down capital gain taxes if the beneficiary of the dead person sells the asset. Example: Daniel Oldboy buys a house for $30,000, and when he dies the place is worth $250,000. When his son and heir receives the property, the son can sell it for $250,000 with no capital gains tax, but if Dad had sold it before his death there would have been capital gains on $220,000. It can be more complicated than this simple example with assets jointly held with a spouse, exchanges of property, and other variations which require professional assistance. (See: adjusted basis)
basisnoun assumption, authority, background, base, cause, essence, foundation, fulcrum, fundamentals, fundus, ground, groundwork, hypothesis, justification, motive, premise, principle, proposition, purpose, raison d'être, rationale, reason, root, source, support, underlying principle, warrant
Associated concepts: basis of cost, basis of keeping accounts, basis of the bargain, cash basis, contingency basis, cost-plus basis
See also: assumption, base, cause, center, consequence, content, criterion, derivation, determinant, documentation, essence, foundation, gist, ground, main point, meaning, pattern, precedent, preparation, purpose, rationale, reason, significance, source, stare decisis, substance, supposition