Question State Return

[cmolovich]

I am in section for Schedule Gains and Losses.

Program says I must enter Cost/Basis.

Don't understand???

[RobertG]

Generally speaking, your cost basis is what you paid for it.

Cost basis is the original purchase cost of an asset (such as stocks, bonds, or property), plus any adjustments that result from transactions over the period you own the asset. Examples of adjustments would be an increase in valuation due to a property improvement or a decrease in valuation due to a sale of a portion of the property.

When you sell the asset, your cost basis gets subtracted from the money you collect from the sale. Instead of paying tax on the full amount, you only get taxed on the profit (the selling price minus the cost basis).