Cost-basis is an accounting term used to refer to the original value of a financial asset at the time it was purchased. This amount, along with any income generated from the asset such as dividends or interest, is used in computing gains or losses when the asset is sold or exchanged. In other words, cost-basis is the starting point for determining an investment’s value. It helps investors keep track of their capital gain or loss when disposing of any assets and is essential for tax filing purposes.