Basis 2022-06-20 08:00:00

Basis

Basis, in the context of commercial real estate, is the original purchase price or cost of investment property plus any out-of-pocket expenses or closing costs related to the acquisition of the property. Also known as “cost basis” or “tax basis”.

For example, if an investor purchases a property for $1,000,000 and pays $10,000 for title insurance and another $10,000 in loan fees, their initial basis in the property would be $1,020,000. 

It is important to note that a taxpayer’s tax basis in a given asset may include several other adjusting factors such as accumulated depreciation deductions claimed during the time of ownership or the value of deferred capital gains from tax deferred exchanges executing during the acquisition of the asset. This is known as Adjusted Basis.

 


Download our guide to real estate investing

Another Way To Own Investment Properties

Learn new ways to use real estate to pursue your wealth goals.

By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received.