Definitions for "CARRYOVER BASIS"
In a tax-deferred exchange, the adjusted tax basis of the property surrendered that is used to determine the tax basis of the property acquired. See basis (tax).
A tax basis where the recipient of a gift has the donor's basis in the property.
Treatment for capital gains tax purposes of a recipient's basis in appreciated property when recipient takes the donor's basis.  For gift tax purposes, the recipient takes the donor's basis.  Pursuant to the 2001 Tax Act, upon full repeal of the estate tax currently scheduled for 2010, a modified carryover basis regime will apply to property passing at a decedent's death rather than the current step-up in basis.