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An important financial record – your asset basis

Radio Transcript, 60 seconds, for use during week of Dec. 31.

This is an Invest Wisely minute brought to you by Iowa State University Extension.

One of the important financial records investors need to keep track of is basis.  This is the acquisition cost assigned  to an asset for income tax purposes.

If you sell an asset and cannot prove your basis the IRS can apply a basis of zero, which means they think you made a lot more money than you did. It can be a costly mistake.

And if you give a security as a gift, the person you give it to must use the same basis as yours.  Basis recordkeeping is key to successful investing.

Invest Wisely comes from Iowa State University Extension through a grant from the Investor Protection Trust providing investor education on the web at investorprotection.org.

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Updated December 26, 2007