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Simple English definitions for legal terms

carryover basis

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A quick definition of carryover basis:

Carryover basis is a way to figure out how much tax someone owes when they get a gift of something valuable, like a stock or a piece of property. Normally, when you sell something for more than you paid for it, you have to pay taxes on the profit. But if you get something as a gift, you didn't pay for it, so there's no "cost basis" to figure out the profit. With carryover basis, you use the original cost basis of the person who gave you the gift to figure out how much profit you made when you sell it. This is different from a step-up basis, which is used when you inherit something and the cost basis is adjusted to the value of the item when the person who gave it to you died.

A more thorough explanation:

Carryover basis is a way to calculate taxes on a gifted asset. When someone receives a gift, they don't have a purchase price to use for calculating capital gains taxes. Carryover basis uses the original purchase price of the asset to calculate the gain.

Tom gave Rachel a share of Pear Inc. as a gift when the share price was $100. Later, Rachel sold the share when the price rose to $200. Under carryover basis, Rachel would owe taxes on the $100 capital gain ($200 - $100 = $100).

Another example: Rachel inherited a share of Pear Inc. from Tom's will when the stock price was $150. In this case, a step-up basis would apply, and Rachel would only owe taxes on the $50 capital gain ($200 - $150 = $50).

Carryover basis is used when someone receives a gift and needs to calculate capital gains taxes. It uses the original purchase price of the asset to determine the gain. In the first example, Rachel received a share of Pear Inc. as a gift and sold it later. The gain was calculated using the original purchase price of $100. In the second example, Rachel inherited the share and the gain was calculated using the market value at the time of inheritance.

carryover | cartel

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Dkk
19:42
SEO is big money
2016 pushed the conservative party into populism irreversibly
Dkk
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Maybe, but if this is populism, then every election is populist.
19:43
@Dkk: yeah register 1 website and every swinging tom dick and harry calls/emails/texts to 'help with seo'. like bruh, if YOU found it, what i am doing is working
Dkk
19:43
Indeed!
19:48
wasp, i think people are hopeful for a gov who at least attempts to care about the common man
MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
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