Cost Base Definition

The cost base of an asset is the original price paid for the asset, plus any costs incurred to acquire or improve the asset. For example, if you paid $100 for a stock and then spent $10 on broker fees to buy it, your cost base would be $110.

The cost base is important for tax purposes because it determines how much profit or loss you make when you sell the asset. If your cost base is higher than the selling price, you have made a capital loss and may be able to offset this against other capital gains.