Tax Planning with Basis

When an individual purchases property, inherits property, or is gifted property, they obtain a tax basis in the property. Basis is generally the amount of the taxpayer’s capital investment in the property, which is subsequently increased or decreased for events that occur during their ownership of the property. As the applicable estate and gift exemption continues to rise ($22.36 million for married couples in tax year 2018), tax planning with an individual’s basis is becoming even more relevant.