Basis

Your cost in an asset for tax purposes—usually purchase price plus certain adjustments. Gain or loss equals amount realized minus adjusted basis.

How Basis fits 2026 planning

Basis sits inside capital gains, dividends, wash-sale timing, and surtaxes such as NIIT that sit beside ordinary brackets. For tax year 2026, US Tax Tools treats year-scoped constants (brackets, contribution limits, wage bases, credit schedules) as separate datasets — so explanations of Basis should be read with the same year selected in any linked calculator.

Category focus: Investment. Readers usually land on this page while comparing a paycheck estimate, a credit phaseout, or a retirement contribution room figure that depends on understanding Basis first.

Worked example

If you buy shares for $5,000 and reinvest $200 of taxable dividends that increase basis, selling for $7,000 produces a $1,800 gain, not $2,000.

Treat the example as a teaching sketch, not a filing position. Change filing status, state residency, or mid-year events and the same definition of Basis can produce a different cash outcome even when the glossary text stays the same.

What to watch for

Definitions of Basis can differ slightly across IRS publications, SSA rules, Marketplace subsidy worksheets, and state agencies. When two programs both say “income,” confirm which modification rules apply — MAGI for one credit is not always MAGI for another.

Legislation and inflation adjustments can move the dollar thresholds around Basis without renaming the concept. Prefer the effective date on the primary source (Rev. Proc., SSA notice, USDA table, or state DOR bulletin) over any blog summary — including this one if a later notice supersedes it.

Confirm how Basis appears on your forms by reading the IRS instructions for the schedules that match your facts. Educational definitions here cannot capture every exception or state overlay.

You may also see this concept labeled as adjusted basis, cost basis. Search engines and payroll portals sometimes use those aliases interchangeably with “Basis.”

Next step

When you are ready to model numbers, open the Basis related calculator on US Tax Tools. Engines keep tax-year datasets separate so a 2025 habit does not silently reuse a 2026 constant.

Related reading: Tax insights for longer 2026 explainers, Methodology for how engines store cents and traces, and Disclaimer for educational-use limits.