How to calculate cost basis on sale of rental property

You can calculate your cost basis per share in two ways: Take the original investment amount ($10,000) and divide it by the new number of shares you hold (2,000 shares) to arrive at the new per share cost basis ($10,000/2,000=$5.00).

Basis is generally the amount of your capital investment in property for tax purposes. Use your basis to figure depreciation, amortization, depletion, casualty losses, and any gain or loss on the sale, exchange, or other disposition of the property.

Homeowners: A homeowner's cost basis generally consists of the purchase price of the property, plus the cost of capital improvements, minus any tax credits (like the Residential Energy Credits) that they've received.