Cost Basis
Financial term in the Investing category
Definition
The original purchase price of an asset, used to calculate capital gains or losses for tax purposes. Adjusted for stock splits, dividends, and return of capital.
Frequently Asked Questions
What is Cost Basis?
The original purchase price of an asset, used to calculate capital gains or losses for tax purposes. Adjusted for stock splits, dividends, and return of capital.
Why is Cost Basis important in personal finance?
Cost Basis is an important investing concept that helps individuals make better financial decisions. Understanding Cost Basis can improve your financial planning and help you achieve your money goals.
How does Cost Basis relate to Capital Gains?
Cost Basis and Capital Gains are related financial concepts. The profit realized from selling an asset for more than its purchase price. Capital gains can be short-term (held less than a year) or long-term (held more than a year), with different tax implications.
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