Cost basis is what you pay for something. It is not always cash. Basis can be a purchase price, a gift, an inheritance, a barter, etc. Fees that you pay are expenses against your income.
In most situations, the basis of an asset is its cost to you.
The cost is the amount you pay for it in
- cash
- debt obligations and
- other property and services.
Cost includes sales tax and other expenses connected with the purchase.
- Escrow fees on closing
- Improvements before renting
- Damage deductions
