{
  "id": "RL34662",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL34662",
  "active": true,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 344785,
      "date": "2008-11-25",
      "retrieved": "2016-04-06T22:33:21.462807",
      "title": "Tax Basis: What Is It? Why Is It Important?",
      "summary": "\u201cTax basis\u201d is one factor used to determine the income tax consequences when an item is disposed of, whether by sale, abandonment, or contribution. The initial basis is usually cost; however, the basis of a gift is related to its basis in the donor\u2019s hands, and the basis of inherited property is generally the property\u2019s fair market value on the date of death. The taxpayer\u2019s use of the item and subsequent events may require adjusting the original basis, which leads to the term \u201cadjusted basis.\u201d Adjustments may either increase or decrease the taxpayer\u2019s basis in the property.\nOn July 30, 2008, Congress passed the Housing Assistance Tax Act of 2008 as part of the Housing and Economic Recovery Act of 2008 (P.L. 110-289). It includes a refundable credit for first-time homebuyers. Unlike other proposals for homebuyer tax credits considered by the 110th Congress (H.R. 5565; S. 12, S. 2566, S. 2734), taxpayers generally are not required to reduce their basis in their newly acquired property by the amount of the credit, but are required to pay the credit back. There is a provision for reducing the basis by the credit if the taxpayer sells the property before repaying the credit. In this case, the reduced basis is used to determine whether the taxpayer must repay the remaining credit.\nOther recently passed legislation requires reduction in the basis of a taxpayer\u2019s principal residence if the taxpayer has cancelled mortgage debt that is excluded from gross income (P.L. 110-142). The Internal Revenue Code (I.R.C.) has a number of provisions that require taxpayers to reduce their basis in property and others that allow them to increase their basis in property.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": true,
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          "url": "http://www.crs.gov/Reports/RL34662",
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      "topics": []
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}