adjusted basis


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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.

Adjusted Basis

The cost of an asset after various deductions and additions such as depreciation, brokerage fees, or dividends. Tax on such an asset is calculated from the adjusted basis rather than the price that was actually paid.

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.

adjusted basis

A tax and accounting term referring to the original acquisition cost of a property, with the following adjustments:

• Depreciation, which reduces the basis

• Capitalized closing costs, which increase the basis

• Capital improvements, such as a new roof, which increase the basis

The difference between the adjusted basis and the ultimate sale price of a property will be the taxable profit on the sale.The adjusted basis is an extremely important tax concept,and one which it is important to master in order to comfortably evaluate properties.

Adjusted Basis

The cost or other original basis of property reduced by adjustments such as depreciation allowed or allowable and casualty losses, and increased by the cost of capital improvements, expenses of purchase, and other adjustments.
References in periodicals archive ?
Operating income: On an adjusted basis, operating income for the fourth quarter was $83 million, compared to $25 million in the year-ago quarter.
A fraction, the numerator of which is the adjusted basis of the intangible as of the disposition date; the denominator is the total adjusted basis of all retained Sec.
The total amount of the liabilities the three transferred to the corporation exceeded the adjusted basis of the property by $510,690.
Coverage metrics, on a risk adjusted basis remain adequate, especially given the inherent volatility normally associated with development business cash flows.
S's adjusted basis was $10 for asset A and $50 for asset B.
To determine the adjusted basis of each share in a category, the total adjusted basis of all the shares in the category is divided by the total shares in the category at that time.
Alden's adjusted basis in her interest in ABC Partnership is $5,000.
Maloof (65) dealt with a sole shareholder guaranteeing a $4 million bank loan, assigning a life insurance policy as collateral and taking the position that this gave him adjusted basis for loss under Sec.
No assets contributed to the partnership had an adjusted basis in excess of FMV on contribution.
Generally, a building's adjusted basis is equal to its purchase price less land value plus capital improvements made, less depreciation taken.
The gain on the transaction, as determined under IRC section 1001, is the difference between the amount realized on the disposition and the properry's adjusted basis.