Tax Basis 101

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Understanding tax basis is foundational to accurate tax compliance and effective client advising. Basis directly impacts depreciation, amortization, casualty losses, and the calculation of gain or loss upon the sale, exchange, or disposition of property. Because errors in basis calculations can lead to overstated gains, missed deductions, or increased audit exposure, tax and accounting professionals must understand both the fundamentals and the common exceptions to the cost basis rules. This course provides a clear, practical introduction to tax basis concepts and their real‑world application.

Led by Susan Harper, Certified Fraud Examiner and retired IRS Internal Revenue Agent, this course walks participants through the determination of cost basis and adjusted basis for a variety of assets, including securities, real property, and business assets. Attendees will explore situations where basis is not equal to cost, such as non‑taxable exchanges, property received by gift or inheritance, and assets converted from personal to business or rental use. Through examples and scenarios, participants gain the confidence to compute basis accurately and advise clients effectively.

Who Should Attend
This course is designed for professionals who advise clients on transactions involving the acquisition, disposition, or conversion of property.

Topics Covered

• Definition and importance of cost basis
• Adjusted basis calculations
• Basis other than cost
• Non‑taxable and like‑kind exchanges
• Property received by gift or inheritance
• Conversion of personal property to business or rental use
• Common basis errors and compliance risks

Learning Objectives

• Determine the cost basis of common assets, including securities, real property, and business assets
• Calculate adjusted basis prior to determining gain or loss on the disposition of property
• Identify situations in which basis is other than cost
• Explain the tax treatment of non‑taxable exchanges
• Apply basis rules to property received by gift or inheritance
• Evaluate basis considerations when property is converted from personal to business or rental use

Level
Intermediate

Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Tax practitioners at all levels who provide advice and return preparation involving sales of property.

Advance Preparation
None