E. None of these The cost basis of an asset at the moment it is sold is its tax basis. An asset's initial acquisition cost serves as the basis for cost basis.
The tax basis comprises all acquisition charges, including taxes, fees, commissions, and shipping, in addition to the asset's initial purchase price. The tax basis of an asset may alter while it is owned by a business. The tax basis is increased by capital improvements and reinvested profits, while the tax basis is decreased by annual depreciation. While stock splits lower the basis of individual shares but not the basis of the entire investment, mergers and bankruptcy proceedings can potentially raise or lower the tax basis of an investment. An asset's tax basis frequently depends on the method of acquisition. For instance, assets that were purchased, acquired as a gift, or inherited have various tax bases.
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