If tax professional does not establish basis for an asset that is sold?

If a tax professional does not establish the basis for an asset that is sold, it can lead to inaccurate reporting of capital gains or losses on tax returns. Without a clear basis, the taxpayer may overstate or understate their taxable income, potentially resulting in overpayment or underpayment of taxes. This oversight can lead to audits, penalties, or interest charges from tax authorities. Proper documentation and calculation of basis are crucial for compliance and to optimize tax outcomes.