When you sell an investment, your gains or losses depends on your cost basis.
If you sell for more than your cost, you end up owning capital gains taxes on the increase. If you sell at a loss, you don’t have to pay taxes on the difference; instead, you might be able to claim a tax deduction for your investment loss.
What is Cost Basis?
[Read more…] about Cost Basis Reporting – How it Affects Your Taxes