An accounting method under which you report your income when you earn it, whether or not you have received it. You generally deduct your expenses when you incur a liablity for them, rather than when you pay them. The basis of property you buy is usually the cost.
Basis is used to figure gain or loss on the sale or disposition of investment property.
An option that entitles the purchaser to buy, at any time before a specified future date, property such as a stated number of shares of stock at a specified price. An accounting method under which you report your income in the year in which you actually or constructively receive it. You generally deduct your expenses in the year you pay them. A person who is actively engaged in trading section 1256 contracts and is registered with a domestic board of trade designated as a contract market by the Commodities Futures Trading Commission. A contract made on a commodity exchange, calling for the sale or purchase of a fixed amount of a commodity at a future date for a fixed price.