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Definition of Base Cost

Definition of Base Cost

Base cost means the cost of an asset against which any proceeds (the price) upon disposal (sale) are compared in order to determine whether a capital gain (a profit) or loss has been realised.

Base cost includes those costs actually incurred in acquiring, enhancing or disposing of a capital asset that are not allowable as a deduction from income.

The following are included in the base cost of an asset: Acquisition cost, Incidental costs of acquisition and disposal, Capital costs of maintaining title or right to an asset and/or Cost of improvements or enhancements. See the SARS definition for more detail.