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Publication 551 - Introductory Material


Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.


Basis is the amount of your investment in property for tax purposes. Use the basis of property to figure depreciation, amortization, depletion, and casualty losses. Also use it to figure gain or loss on the sale or other disposition of property. You must keep accurate records of all items that affect the basis of property so you can make these computations.

This publication is divided into the following sections.

  • Cost Basis

  • Adjusted Basis

  • Basis Other Than Cost

The basis of property you buy is usually its cost. You may also have to capitalize (add to basis) certain other costs related to buying or producing the property.

Your original basis in property is adjusted (increased or decreased) by certain events. If you make improvements to the property, increase your basis. If you take deductions for depreciation or casualty losses, reduce your basis.

You cannot determine your basis in some assets by cost. This includes property you receive as a gift or inheritance. It also applies to property received in an involuntary conversion and certain other circumstances.

Comments and suggestions.    We welcome your comments about this publication and your suggestions for future editions.

  You can send us comments from Click on “More Information” and then on “Give us feedback.

  Or you can write to:

Internal Revenue Service 
Tax Forms and Publications 
1111 Constitution Ave. NW, IR-6526 
Washington, DC 20224

  We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

  Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.

Ordering forms and publications.    Visit to download forms and publications. Otherwise, you can go to to order forms or call 1-800-829-3676 to order current and prior-year forms and instructions. Your order should arrive within 10 business days.

Tax questions.   If you have a tax question, visit or call 1-800-829-1040. We cannot answer tax questions sent to the above address.

Useful Items - You may want to see:


  • 463 Travel, Entertainment, Gift, and Car Expenses

  • 523 Selling Your Home

  • 525 Taxable and Nontaxable Income

  • 527 Residential Rental Property

  • 530 Tax Information for Homeowners

  • 535 Business Expenses

  • 537 Installment Sales

  • 544 Sales and Other Dispositions of Assets

  • 547 Casualties, Disasters, and Thefts.

  • 550 Investment Income and Expenses

  • 559 Survivors, Executors, and Administrators

  • 587 Business Use of Your Home

  • 946 How To Depreciate Property

Form (and Instructions)

  • 706 United States Estate (and Generation-Skipping Transfer) Tax Return

  • 706-A United States Additional Estate Tax Return

  • 8594 Asset Acquisition Statement

See How To Get Tax Help near the end of this publication for information about getting publications and forms.

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