Also known as transferred basis. Property with a basis determined in whole or in part by reference to the basis in the hands of the transferor. For example, in a tax-free reorganization that is structured as an asset acquisition, the purchasing corporation takes a carryover basis in the target company's assets (in other words, the purchasing corporation's basis in the target company's assets is the same as the basis that the target company had in those assets).

For more information about carryover basis transactions, see Practice Notes, Tax-Free Reorganizations: Acquisitive Reorganizations and What's Market: Tax-free Transactions.