basis
noun
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Definition of basis
1 : the bottom of something considered as its foundation
2 : the principal component of something Fruit juice constitutes the basis of jelly.
3a : something on which something else is established or based stories with little basis in reality no legal basis for a new trial still some basis for hope selected on the basis of test scores
b : an underlying condition or state of affairs hired on a trial basis He is on a first-name basis with his customers.
c : a fixed pattern or system meets with us on a regular basis [=regularly] The department sends reports on a daily basis. [=every day]
4 : the basic principle concepts that form the basis of the country's economic policies
5 mathematics : a set of linearly independent vectors (see vector entry 1 sense 1a) in a vector space such that any vector in the vector space can be expressed as a linear combination of them with appropriately chosen coefficients (see coefficient sense 1)
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Synonyms for basis
Synonyms
base, bedrock, bottom, cornerstone, footing, foundation, ground, groundwork, keystone, root, underpinning, warp, warp and woof
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Examples of basis in a Sentence
Recent Examples on the Web
On that basis alone, it should be considered for National Historic Landmark status and included on the National Register of Historic Places. Caterina Y. Pierre Brooklyn, N.Y. — Naomi Fry, The New Yorker, "The Mail," 24 June 2018 But David Patrick Columbia, who writes about parties and goings-on-about-town on a daily basis for his New York Social Diary, says that Trump and Kushner were never considered major figures on the party circuit anyway. — Sam Dangremond, Town & Country, "Can Jared Kushner and Ivanka Trump Come Back to New York City?," 20 June 2018 There weren’t people making the calls and selling tickets on a daily basis. — Kelli Stacy, courant.com, "Historically Low Attendance At UConn Men's Basketball, Football Games As Programs Try To Rebuild," 10 July 2018 This is a scratch kitchen, so everything is made fresh on a daily basis. — Donald Liebenson, Lake County News-Sun, "Guide to outdoor dining in Chicago suburbs: Casa Bonita in Libertyville," 8 July 2018 Stephanie’s parents were able to take her home after a month in the hospital, and, like Jamison's parents, were tasked with caring for her skin, eyes, and other disease complications on a daily basis. — Amanda Macmillan, Health.com, "What Is Harlequin Ichthyosis? Mom Bathes Her Baby in Bleach Because of This Rare Genetic Disorder," 21 June 2018 Spanish authorities are examining the migrants on a case-by-case basis to see who may qualify for asylum. — Renata Brito, BostonGlobe.com, "Boats carrying 630 migrants dock in Spain," 17 June 2018 Bayern have already stated their intent to activate the purchase option and make Rodriguez theirs on a permanent basis, but the Colombian's ambitions appear to have changed now that Julen Lopetegui has replaced Zidane in the Bernabeu hotseat. — SI.com, "James Rodriguez Favours Real Madrid Return Following Zinedine Zidane Departure," 13 July 2018 Churchill spent three weeks at the White House, cementing his close ties with Roosevelt and forming the basis for future relations between the U.S. and Great Britain. — Washington Post, "Trump attending dinner at birthplace of Winston Churchill," 12 July 2018These example sentences are selected automatically from various online news sources to reflect current usage of the word 'basis.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
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More Definitions for basis
basis
nounFinancial Definition of basis
What It Is
Basis refers to the original price of an asset. It is sometimes called cost basis or tax basis.
How It Works
Let's assume you purchase 100 shares of Company XYZ stock for $5 per share and you pay a $10 commission for the purchase. Your basis would be:
(100 x $5) + $10 = $510
Income realized from the asset, including dividends and capital distributions (even if they are reinvested rather than received in cash) increase the basis. Thus, in the above example, if your stock paid a $1-per-share dividend every year for three years, your basis would increase to:
$510 + (100 x $1 x 3) = $810
Money spent on improvements to an asset (such as certain home improvements) are added to the asset's basis, and depreciation on the asset is subtracted from the cost basis.
Why It Matters
An asset's basis becomes very important when the owner sells the asset. The difference between the sale price and the basis is called a capital gain (if the sale price is higher than the cost basis) or a capital loss (if the sale price is lower than the basis). Capital gains are generally only taxable when the investor actually sells the asset. Realized losses can often offset these gains and thus lower the investor's potential capital-gains taxes. The length of time the asset is held, among other things, determines the tax effect of the gain or loss. Changes in tax rates also may influence an investor's concern about basis.
An asset's basis is usually based on its original purchase price, but sometimes people inherit assets rather than purchase them. In these cases, the basis of the asset becomes the value of the asset at the time the investor inherits it (this is called a step-up in basis).
Often, investors accumulate shares of the same stock at different prices over time. Because of this, when the investor sells some of the shares, he or she must identify which shares from the "inventory" were sold in order to calculate capital gains or losses. In general, investors want to minimize taxable gains by selling the shares with the highest basis first. However, if the investor cannot identify which shares are which, the IRS requires use of the first-in-first-out (FIFO) method, meaning that the investor must assume he or she first sells the shares that are held the longest. These older shares may not have the highest basis of the investor's inventory of shares, and thus the method could inflate the investor's tax bill.
Source: Investing Answers
adjusted basis
nounFinancial Definition of adjusted basis
What It Is
Adjusted basis refers to the increase or decrease in an asset's value due to depreciation or capital enhancements.
How It Works
From the time an asset is acquired until the time it is sold, an asset experiences a number of events which affect its value. These events can cause an increase or decrease in the asset's total value. An asset's adjusted basis takes the base price of an asset and adjusts it for changes in value reflecting enhancements and or depreciation. For instance, a given asset purchased for $100 that is sold one year later after having experienced $10 in depreciation and $50 in improvements would have an adjusted basis of $100 - $10 + $50 = $140.
Why It Matters
In the event an asset is sold, the adjusted basis is needed for tax purposes as it is used to calculate the capital gain or loss.
Source: Investing Answers
cost basis
nounFinancial Definition of cost basis
How It Works
Let's assume you purchase 100 shares of XYZ Company stock for $5 per share, and you pay a $10 commission for the purchase. Your cost basis would be:
(100 x $5) + $10 = $510
Income realized from the asset, including dividends and capital distributions (even if they are reinvested rather than received in cash) increase the cost basis. Thus in the above example, if your stock paid a $1-per-share dividend every year for three years, your basis would increase to:
$510 + (100 x $1 x 3) = $810
Money spent on improvements to an asset (such as certain home improvements) are added to the asset's cost basis, and depreciation on the asset is subtracted from the cost basis.
Why It Matters
An asset's cost basis becomes very important when the owner sells the asset. The difference between the sale price and the cost basis is called a capital gain (if the sale price is higher than the cost basis) or a capital loss (if the sale price is lower than the cost basis). Capital gains are generally only taxable when the investor actually sells the asset. Realized losses can often offset these gains and thus lower the investor's potential capital-gains taxes. The length of time the asset is held, among other things, determines the tax effect of the gain or loss. Changes in tax rates may also influence an investor's concern about cost basis.
An asset's cost basis is usually based on its original purchase price, but sometimes people inherit assets rather than purchase them. In these cases, the cost basis of the asset becomes the value of the asset at the time the investor inherits it (this is called a step-up in the basis).
Often, investors accumulate shares of the same stock at different prices over time. Because of this, when the investor sells some of the shares, he or she must identify which shares from the inventory were sold in order to calculate capital gains or losses. In general, investors want to minimize taxable gains by selling the shares with the highest cost basis first. However, if the investor cannot identify which shares are which, the IRS requires use of the first-in-first-out (FIFO) method, meaning that the investor must assume he or she first sells the shares that are held the longest. These older shares may not have the highest cost basis of the investor's inventory of shares, and thus the method could inflate the investor's tax bill.
Source: Investing Answers
basis
noun
English Language Learners Definition of basis
: something (such as an idea or set of ideas) from which another thing develops or can develop
: a reason for doing something
: a fixed pattern or system for doing something
See the full definition for basis in the English Language Learners Dictionary
basis
noun
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Kids Definition of basis
: something on which another thing is based or established : foundation The story has its basis in fact.
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basis
noun
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Medical Definition of basis
1 : any of various anatomical parts that function as a foundation
2 : base sense 2b
basis
noun
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Legal Definition of basis
1 : something (as a principle or reason) on which something else is established the court could not imagine any conceivable basis for the statute — see also rational basis
2
: a basic principle or method
especially
: the principle or method by which taxable income is calculated
Note:
The Internal Revenue Code has set some limits on which method a taxpayer may use for figuring taxable income. For example, a corporation with gross receipts under $5,000,000 may be a cash-basis taxpayer.
: a method of accounting in which income and expenses are recorded in the period when they are earned or incurred regardless of when the payment is received or made
— called also
accrual method
: a method of accounting in which income and expenses are recorded in the period when payment is received or made
— called also
cash method
3 : the value (as cost or fair market value) of an asset used in calculating capital gains or losses for income tax purposes
: the basis of an asset increased or decreased to reflect changes in value (as through improvement or depreciation)
: the basis of a donated or transferred asset that is equal to the basis of the asset when it was in the hands of the donor or transferor
Note:
Carryover basis is generally applied to gifts and to transfers in trust.
: the basis of an asset equal to the amount paid for the asset plus other acquisition costs
: the basis of inherited property equal to its market value at the decedent's date of death or to an alternate valuation
: the basis of property received in exchange for property of a like kind that is equal to the basis of the property given with adjustments for additional consideration received or gains and losses realized
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