How Do You Spell CARRYOVER BASIS?

Pronunciation: [kˈaɹɪˌə͡ʊvə bˈe͡ɪsɪs] (IPA)

Carryover basis is a term used in taxation to describe the value of an asset transferred to a new owner, typically a beneficiary of an estate. The term is pronounced /ˈkæriˌoʊvər beɪsɪs/ (KARR-ee-OH-vuhr BAY-sis), with stress on the first syllable of both words. The spelling of the word reflects its constituent parts: "carryover" meaning to bring something from one place to another, and "basis" meaning the starting point or foundation for something. Together, they create a term that refers to the original value of an asset that has been transferred.

CARRYOVER BASIS Meaning and Definition

1. Carryover basis refers to the value or cost of an asset that is transferred from one person or entity to another, typically due to a transfer of ownership, without any adjustments to its original cost or value. It is commonly used in the context of tax law, specifically in relation to the transfer of assets either by inheritance, gift, or other forms of intergenerational transfers.

   When an asset is transferred, the carryover basis allows the recipient to assume the same basis as the original owner. This means that the recipient takes on the original cost or value of the asset, and any gains or losses associated with it will be determined based on that starting point. The purpose of carryover basis is to avoid the double taxation of assets and to maintain consistency in determining the tax implications of asset transfers.

   For example, if an individual inherits a stock portfolio from a deceased family member, the carryover basis means that the individual's basis in the inherited stocks will be the same as the deceased person's basis at the time of death. If the individual decides to sell those stocks, the capital gains or losses will be calculated based on the original cost or value of the stocks, rather than the current market value at the time of inheritance.

   Carryover basis can have significant implications for tax planning and the determination of capital gains or losses, particularly in situations involving inherited assets or the transfer of assets between family members.

Common Misspellings for CARRYOVER BASIS

• xarryover basis
• varryover basis
• farryover basis
• darryover basis
• czrryover basis
• csrryover basis
• cwrryover basis
• cqrryover basis
• caeryover basis
• cadryover basis
• cafryover basis
• catryover basis
• ca5ryover basis
• ca4ryover basis
• careyover basis
• cardyover basis
• carfyover basis
• cartyover basis
• car5yover basis
• car4yover basis

Etymology of CARRYOVER BASIS

The etymology of the term "carryover basis" can be understood by breaking down the individual components:

1. Carryover: In this context, "carryover" refers to the act of transferring or continuing something from one period to another. The term "carryover" has its roots in sports and gaming, where it originally meant to transfer points or scores from one round to the next.

2. Basis: In finance and accounting, "basis" refers to the original cost or value assigned to an asset for various purposes, such as taxation, accounting, or calculating capital gains.

Therefore, "carryover basis" is a term used in taxation and refers to the transfer of an asset's original cost or value from one period or entity to another. This can occur in situations such as the transfer or inheritance of assets, where the recipient continues to use the original basis for tax purposes.