Investing term
What is Cost basis?
What you originally paid for a holding, used to calculate gains and losses when you eventually sell.
Cost basis is what you originally paid for a holding, including fees, and it's the number used to calculate your taxable gain or loss when you sell. Keeping accurate basis matters — especially when you've bought the same investment at different prices over time — because it directly determines your tax bill.
For example
You bought shares for $3,000 (your cost basis) and sell for $5,000 — the $2,000 difference is the gain you'll owe tax on.
Cost basis is taught hands-on in Stage 8 — Corporate Actions: What Lands in Your Account.
See the lesson →