The term "Basis" is used in finance to refer to the difference between the prices and the expenses involved in transactions when calculating taxes. This usage is related to the broader terms "cost basis" or "tax basis" and is specifically used when capital gains or losses are calculated for income tax filings.Basis can be a helpful tool in measuring your gains or losses from investments. By knowing your basis, you can more accurately calculate your capital gains or losses for tax purposes. If you don't have a good understanding of your basis, you may end up overpaying or underpaying your taxes.If you're investing in something that will be subject to capital gains taxes, it's important to understand the concept of basis. With a little planning, you can minimize your tax liability and keep more of your hard-earned money.
