[Determined24]

hi Ninja’s

New to the CPA and American tax and law.

What does basis means?

In addition, anyone know what formulas and percentages will be given or what will not be given.

The forms such as 1040 etc will we be asked to fill those out or to calculate a portion of it ?

[Anonymous]

Basis is your cost or ownership in an asset / investment. For instance if you bought a house for $200,000 and you paid an additional 20,000 to upgrade the garage, your cost basis is 220,000. If you later sell it for 300,000 then your gain on sale is:
300,000 sales proceeds
-220,000 cost basis
= 80,000 gain on sale.

[Determined24]

@6silvermoonbeams

Very clear explanation thank you.

It is not very easy transitioning to US Tax and Law, I have to be relearning as an international and sometimes when you Google these words or the review system's meaning doesn't give you a simple and understandable meaning.

Thanks much

[Anonymous]

Also, regarding your last question about the 1040. You do need to know cost basis to determine what your gain / loss is for a sale or disposition of an asset.

Basis is also affected by income and loss as well as contributions and distributions. This is important for determining tax basis in an investment. Contribution plus income (less loss) less distributions is your tax basis. Similar to how equity is calculated.

[Determined24]

Awesome

[melody_pinaycpa]

@determined24 – I feel you as I am also an international candidate. I had difficulty tackling the American taxation. In fact I just had my third attempt in Regulation while I was able to pass the other 3 sections at first attempt.

As you go along your review you will learn the basis for partnership, partners, C corporation, shareholder, gifts, bequest, etc. I wrote the different types of basis on the first page of my re-written notes.

FAR (Apr 2015) - 88
AUD (July 2015) - 86
BEC (Oct 2015) - 82
REG - 73, 70, retake Sept 2016

[Determined24]

Thanks @melody_pinaycpa

When you say I will learn the basis for partnership, partners, C corporation, shareholder, gifts, bequest, etc?

You mean I will learn what or how much is taxable and non-taxable ?

[Author]

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