The Internal Revenue Code generally taxes appreciation in the value of property only on realization, defined to mean when property is sold or exchanged. In measuring gain on a sale or exchange, an allowance must be made for the return of capital, referred to as basis. Basis offsets the amount realized-that is, the price received for property-in order to calculate taxable gain.
Stephen B. Cohen, Apportioning Basis: Partial Sales, Bargain Sales and the Realization Principle, 34 San Diego L. Rev. 1693 (1997)
Scholarly Commons Citation
Cohen, Stephen B., "Apportioning Basis: Partial Sales, Bargain Sales and the Realization Principle" (1997). Georgetown Law Faculty Publications and Other Works. Paper 1589.