Cost Basis
Category: Investment
Generally what you paid for an asset, adjusted for commissions, improvements, return of capital, and wash-sale adjustments. Gain or loss starts from basis.
How Cost Basis fits 2026 planning
Cost 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 Cost 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 Cost Basis first.
Worked example
Buying stock for $10,000 and selling for $15,000 produces $5,000 of gain if basis remains $10,000.
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 Cost Basis can produce a different cash outcome even when the glossary text stays the same.
What to watch for
Definitions of Cost 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 Cost 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 Cost 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.
Next step
When you are ready to model numbers, open the Cost 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.