Dictionary of Law
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basis :: legal definition


Basis - n. the original cost of an asset to be used to determine the amount of capital gain tax upon its sale. An "adjusted basis" includes improvements, expenses, and damages between the time the original basis (price) is established and transfer (sale) of the asset. "Stepped up basis" means that the original basis of an asset (especially real property) will be stepped up to current value at the time of the death of the owner, and thus keep down capital gain taxes if the beneficiary of the dead person sells the asset. Example: Daniel Oldboy buys a house for $30,000, and when he dies the place is worth $250,000. When his son and heir receives the property, the son can sell it for $250,000 with no capital gains tax, but if Dad had sold it before his death there would have been capital gains on $220,000. It can be more complicated than this simple example with assets jointly held with a spouse, exchanges of property, and other variations which require professional assistance.

See also: adjusted basis and Related Law Terms ↓


Related Law Terms

ad valorem :: adj. Latin for "based on value," which applies to ... per parcel. See also: property tax
adjusted basis :: n. in accounting, the original cost of an asset ad ... s taxes. See also: basis income tax
advancement :: n. a gift made by a person to one of his or her ch ... tate gift in contemplation of death
assess :: v. to set a value on property, usually for the pur ... e place upon sale of real property.
bankruptcy :: n. a federal system of statutes and courts which p ... y proceedings trustee in bankruptcy
Bill of Rights :: n. the first ten amendments to the federal Constit ... ved to the states or to the people.
capital :: 1) n. from Latin for caput, meaning "head," the ba ... count capital assets stock in trade
capital expenditure :: n. payment by a business for basic assets such as ... y intended to improve productivity.
capital gains :: n. the difference between the sales price and the ... so: basis delayed exchange exchange
capital offense :: n. any criminal charge which is punishable by the ... . See also: bail capital punishment
capital punishment :: n. execution (death) for a capital offense. The U. ... or death. See also: capital offense
capital stock :: n. the original amount paid by investors into a co ... price. See also: corporation stock
charitable remainder trust (Charitable Remainder Irrevocable Unitrust) :: n. a form of trust in which the donor (trustor or ... ed up or committed. See also: trust
color of title :: n. the appearance of having title to personal or r ... rty based on this "color of title."
conditional bequest :: n. in a will, a gift which will take place only if ... rries." See also: bequest executory
dealer :: n. anyone who buys goods or property for the purpo ... ins taxes by buying other property.
double taxation :: n. taxation of the same property for the same purp ... it is not discriminatory or unfair.
equity :: n. 1) a venerable group of rights and procedures t ... ry enjoin equitable injunction writ
exchange :: 1) v. to trade or barter property, goods and/or se ... ins tax. See also: delayed exchange
executed :: 1) adj. to have been completed. (Example: "it is a ... a death sentence. See also: execute
execution :: n. 1) the act of getting an officer of the court t ... so: death penalty writ of execution
foreclosure :: n. the system by which a party who has loaned mone ... ced sale mortgage notice of default
franchise :: 1) n. a right granted by the government to a perso ... on property, income or profits tax.
gift in contemplation of death :: n. (called a gift causa mortis by lawyers showing ... ift tax unified estate and gift tax
heir :: n. one who acquires property upon the death of ano ... y pretermitted heir succession will
impound :: v. 1) to collect funds, in addition to installment ... cases. See also: forfeit forfeiture
joint tenancy :: n. a crucial relationship in the ownership of real ... ty property tenancy in common title
lease :: 1) n. a written agreement in which the owner of pr ... triple net lease unlawful detainer
levy :: 1) v. to seize (take) property upon a writ of exec ... heriff's sale tax writ of execution
lien :: n. any official claim or charge against property o ... ord's lien mechanic's lien mortgage
life estate :: n. the right to use or occupy real property for on ... hter, Sadie, will own the property.
Magna Carta :: n. Latin for "Great Charter," it was a document de ... s. It is also spelled Magna Charta.
marital deduction :: n. an estate tax deduction allowed a surviving spo ... community property estate tax trust
murder :: n. the killing of a human being by a sane person, ... premeditation second degree murder
option :: n. a right to purchase property or require another ... ng or upon expiration of the lease.
possession :: n. 1) any article, object, asset or property which ... ctive possession. See also: possess
possibility of a reverter :: n. the potential that the title to a real property ... further issue. See also: reversion
pour over will :: n. a will of a person who has already executed a t ... invalid trust. See also: trust will
pro rata :: (proh rat-ah or proh ray-tah) adj. from Latin for ... e year in which he/she holds title.
property tax :: n. an annual governmental tax on real property or ... are made. See also: ad valorem tax
protest :: 1) v. to complain in some public way about any act ... dishonored (not paid by the bank).
record :: 1) v. (ree-cored) to put a document into the offic ... eeding race to the courthouse trial
remainder :: n. in real property law, the interest in real prop ... ed reversion title vested remainder
restraint on alienation :: n. an attempt in a deed or will to prevent the sal ... enant rule against perpetuities use
rule against perpetuities :: n. the legal prohibition against tying up property ... . See also: restraint on alienation
special circumstances :: n. in criminal cases, particularly homicides, acti ... urant. See also: capital punishment
statute of limitations :: n. a law which sets the maximum period which one c ... ies. See also: demurrer laches toll
subject to :: adj. referring to the acquisition of title to real ... : assumption deed of trust mortgage
tax :: n. a governmental assessment (charge) upon propert ... unified estate and gift tax use tax
title report :: n. the written analysis of the status of title to ... lso: abstract title title insurance
tort :: n. from French for "wrong," a civil wrong or wrong ... nce slander trespass wrongful death
trust :: n. an entity created to hold assets for the benefi ... testamentary trust trustee trustor

Popular Law Searches

legal definition ministerial act :: n. an act, particularly of a governmental employee ... exercising any individual judgment.
chancery legal definition :: n. a court that can order acts performed. Today ch ... ts in most states. See also: equity
testamentary disposition legal definition :: n. how the terms of a will divide the testator's ( ... named beneficiaries. See also: will
contract of sufferance :: n. a "hold-over" tenancy after a lease has expired ... y tenancy at will unlawful detainer
forthwith legal definition :: adv. a term found in contracts, court orders and s ... mediacy, with no excuses for delay.
forthwith definition legal :: adv. a term found in contracts, court orders and s ... mediacy, with no excuses for delay.
what is to wit in a legal contract :: prep. that is to say. Example: "the passengers in ... tty Bumgartner and Sherry Younger."
mirror wills legal definition :: n. the wills of a husband and wife which are ident ... d each names the other as executor.
clean hands doctrine latin :: n. a rule of law that a person coming to court wit ... ices. See also: affirmative defense
sine qua non only relates to contract law :: (see-nay kwah nahn) prep. Latin for "without which ... qua non of the injury to Playmate.

Other Law Terms - B

Bachelor of Laws :: n. the degree in law from a law school, abbreviate ... troactively. See also: Juris Doctor
back-to-back life sentences :: n. slang for consecutive life terms imposed by a j ... ther 25 years for a parole hearing.
bad debt :: n. an uncollectible debt. The problem is to determ ... ust no income on which to be taxed.
bad faith :: 1) n. intentional dishonest act by not fulfilling ... ean hands doctrine fraud good faith
bail :: 1) n. the money or bond put up to secure the relea ... bond bail bondsman own recognizance
bail bond :: n. a bond provided by an insurance company through ... urned. See also: bail bail bondsman
bail bondsman :: n. a professional agent for an insurance company w ... t to jail. See also: bail bail bond
bailee :: n. a person, also called a custodian, with whom so ... he goods. See also: bailment bailor
bailiff :: n. 1) a court official, usually a deputy sheriff, ... isdictional territory of a bailiff.
bailment :: n. 1) the act of placing property in the custody a ... "bailment." See also: bailee bailor
bailor :: n. a person who leaves goods in the custody of ano ... is found. See also: bailee bailment
bait and switch :: n. a dishonest sales practice in which a business ... rants the costs of a separate suit.
balance due :: n. the amount of a debt still owed on an account o ... cipal due without further interest.
balance sheet :: n. the statement of the assets and the liabilities ... ctivity and health of the business.
bank :: n. 1) an officially chartered institution empowere ... erred to as "in bank" or "en banc."
bankruptcy :: n. a federal system of statutes and courts which p ... y proceedings trustee in bankruptcy
bankruptcy court :: n. the specialized federal court in which bankrupt ... : bankruptcy bankruptcy proceedings
bankruptcy proceedings :: n. the bankruptcy procedure is: a) filing a petiti ... ankruptcy court claim in bankruptcy
bar :: 1) n. collectively all attorneys, as "the bar," wh ... a room, building, or real property.
bar association :: n. an organization of lawyers. There are two types ... oluntary organization of attorneys.