The purchase price used to determine capital gains and capital losses for tax purposes. It can be determined using several methods. In the case of a purchased investment, the tax basis is the amount paid. If a taxable item is inherited, the tax basis is the value of the stock on the date of the original owner's death. If a taxable item is a gift, the tax basis is the amount that was originally paid for the investment, unless the market value of the investment on the date the gift is given is lower. Tax basis is also called cost basis or basis.