When the sales price exceeds the associated costs, there is a gain on the sale. Depending on the nature of the item sold, this gain may be ordinary (customarily found in your business) or a capital gain (investment related).

Basis for Tax Purposes

Basis is a term used in computing gains and losses on the disposition of an asset.  For any business owner or individual taxpayer it is important to understand what the Internal Revenue Service (IRS) is really seeking.  What is your tax basis in an asset?  So in a simple transaction such as purchasing stock, assume …

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