---
title: Basis
description: Basis is an asset that is the original purchase price of investment property plus any out-of-pocket expenses related to the acquisition of the property.
---

[Realized 1031 Glossary of Terms ](https://www.realized1031.com/glossary)

# [Basis](https://www.realized1031.com/glossary/basis)

 Written by [The Realized Team](https://www.realized1031.com/glossary/author/the-realized-team) | Jun 20, 2022 12:00:00 PM

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](https://www.realized1031.com/glossary/tax-deferred) exchanges executing during the acquisition of the asset. This is known as [Adjusted Basis](https://www.realized1031.com/glossary/adjusted-basis).

[View full post](https://www.realized1031.com/glossary/basis)

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