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The type of basis used to calculate capital gains tax is called the cost basis.
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One, identify the cost basis.
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The cost basis of an asset is typically the original value of an asset for tax purposes, adjusted for stock splits, dividends, and return on capital distributions.
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This value is used to determine the capital gain, which is equal to the difference between the asset's cost basis and the current market value.
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Two, calculate the capital gain or loss.
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When you sell the asset, subtract the cost basis from the sale price to calculate your capital gain or loss.
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If the sale price is higher than the cost basis, you have a capital gain...