### Question
How is the term cost of securities sold defined?


### Answer
The term **cost of securities sold** is defined in *26 U.S.C. § 75* as the following:

> the amount ascertained by subtracting the inventory value of the closing inventory of a taxable year from the sum of—


(A) the inventory value of the opening inventory for such year, and


(B) the cost of securities and other property purchased during such year which would properly be included in the inventory of the taxpayer if on hand at the close of the taxable year

#### Citation:
  - *26 U.S.C. § 75*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART II-ITEMS SPECIFICALLY INCLUDED IN GROSS INCOME**

