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Finance allah shmoop What is tax basis Well your basis

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is your cost Your costs for assessing how much you

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owe when the tax man coming you bought a thousand

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shares of whatever dot com at twelve bucks a share

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in its eye po and huzzah Three years later the

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stock is at thirty You decide whatever dot com is

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now passe because a kardashians said so it'll be over

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taken by whenever dot com and you want to sell

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So you dio and you live in a thirty percent

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marginal tax blue state And that is your federal tax

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rates in twenty percent But then you add in ten

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percent for state taxes and whatever's left for obamacare and

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you pay about thirty percent tax on your gains Well

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you paid twelve grand to buy the stock and after

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the sale you took in thirty grand when you sold

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it for a gain of eighteen thousand dollars Your tax

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basis on those shares is twelve grand so you pay

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thirty percent tax on the eighteen grand of gain or

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fifty four hundred dollars to net from the sale of

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thirty thousand dollars worth of stock How much Yeah twenty

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Four thousand six hundred dollars He fancy math Had you

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just gotten those shares free I'ii they were gifted to

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you and you had no tax basis or a tax

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basis of zero dollars a share Well then your gain

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would have been from zero to thirty grand or a

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gain of thirty thousand dollars to then be taxed at

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thirty percent or nine grand in taxes to net just

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twenty one thousand dollars after the sale So having ah

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high tax basis or at least being able teo point

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toe one saves you money when the tax man coming

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and well that's pretty much it alright he's gone Now

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you can all come out Come on it's Okay it's 00:01:53.698 --> [endTime] safe

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