Cost basis taxes refer to the amount of money you owe in taxes on investments and assets. It’s important to understand your cost basis and how it affects your tax bill because it can have a profound impact on your overall financial situation. The cost basis of an asset is calculated by subtracting any applicable capital gains or losses from the purchase price of an asset. This value will then be used to calculate the applicable taxes due when that asset is sold. Understanding cost basis taxes can help you make smart investment decisions and maximize your potential returns.