What does carryover basis mean on the CPA exam?
Carryover basis. Basis that follows the property from the previous owner instead of resetting to what was paid. It is what makes a tax-free transfer only tax-DEFERRED.
Defined against Sec. 1015.
Which CPA exam sections use carryover basis?
Carryover basis appears in 6 CPA exam sections: AUD, BAR, FAR, ISC, REG, TCP.
Related terms
- cash basis: Recognizing revenue when cash is received and expense when cash is paid.
- tax basis: What an asset or liability is worth for tax purposes, which is often not what it is worth for accounting.
- adjusted basis: What the taxpayer has invested in property for tax purposes: cost, plus improvements, less depreciation taken.
- debt basis: An S corporation shareholder's basis in loans they personally made to the corporation.
- inside basis: The partnership's own tax basis in the assets it holds.
- outside basis: A partner's tax basis in the partnership interest itself.