Outside Basis

Outside basis is the value of the contributed capital to a partnership or a limited liability company in the hands of the partner or member. Most commonly seen related to the contribution of fixed assets. Compare this to inside basis.

Basis in Business

Basis in Business

Basis is a business term used to identify the value of an individual or entity’s investment in an entrepreneurial endeavor. It is customarily linked to taxation as this term is used by the Internal Revenue Code to determine gain or loss. To further compound its meaning  ‘basis’ is sometimes substituted for the term ‘equity’.

At-Risk Rules – An Elementary Understanding

At-Risk Rules

Code Section 465 of the Internal Revenue Code defines ‘At-Risk’ as the financial value the taxpayer has in jeopardy related to the business activity the taxpayer is invested in as some form of an owner. Effectively, the taxpayer may only take losses on his tax return contingent on the loss being directly tied to invested dollars with some form of tax basis.

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