17 July 2007

Basis

The original cost plus out-of-pocket expenses less income.

Ex: Original shares cost $30 each with a total purchase of 100 shares. The purchase cost $50 to the broker to purchase the shares. The shares paid out dividends of $100 ($1 per share) this year.

$30 x 100 + $50 - $100 = $2,950 would be the "basis."

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