My grandfather owns a farm in Minnehaha County. As part of his estate planning, I keep hearing about "basis." What is basis?

Simply put, basis is the cost to purchase an asset. For example, if you purchase farm land, your basis is the purchase price, plus costs and transfer fees.

This is important because when you sell this asset, tax liability is calculated based on the increase from the basis to the sale price.

Kelley Scrocca, LLM
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