Cost Basis

Cost basis is what you originally paid for an investment, plus any commissions or fees. It's the starting point for calculating capital gains or losses.

For inherited assets, cost basis may be "stepped up" to fair market value at the time of inheritance. Gifted assets typically carry over the donor's cost basis.

Accurate cost basis records are essential for tax reporting. If you reinvest dividends or make multiple purchases, you'll need to track adjusted cost basis.