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Apportioning Basis: Partial Sales, Bargain Sales And The Realization Principle, Stephen B. Cohen

Georgetown Law Faculty Publications and Other Works

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.