adjusted basis

Adjusted Basis

The proportionate value of an asset or security that reflects any deductions taken on, or capital improvements to the asset or security.

Notes:

Adjusted basis is used to compute the gain or loss on the sale an asset or security.

See also: ACRS, Adjusted Cost Base, Declining Balance Method, Depreciation, Unadjusted Basis, Useful Life

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Adjusted basis

Price from which to calculate and derive capital gains or losses upon sale of an asset. Account actions such as any stock splits that have occurred since the initial purchase must be accounted for.

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adjusted basis

The acquisition cost of an asset after it has been adjusted to reflect changes in cost basis that result from the occurrence of certain events following the day of acquisition. For example, stock dividends, stock splits, and dividends deemed to be returned on capital cause a downward adjustment in the cost basis of a security. Conversely, commissions result in an upward adjustment in the cost basis. Adjusted basis is used in calculating gains and losses for tax purposes.