Upon disposition of an original issue debt instrument, the taxable gain or loss realized is generally the sale price of the debt instrument (or the redemption price if the bond is redeemed) minus the adjusted tax basis
In addition, there is a per issuer limit on gains eligible for the exclusion equal to the greater of $10,000,000 or 10 times the adjusted tax basis
of stock issued by the small business and disposed of by the investor during a particular year.
section] 743(d) at the time of the conversion of the grantor trust to a nongrantor trust, the partnership will have to decrease its inside adjusted tax basis
from $1 million to $325,000 under I.
The adjusted tax basis
used to compute the gain or loss on a sale begins with the original cost basis unless the investor acquired the shares by gift or inheritance.
However, the general division rules and other provisions do not account for property with a disparity between the property's fair market value (FMV) and adjusted tax basis
The developer has an ordinary loss equal to the difference between the developer's adjusted tax basis
in the real estate and the fair market value of such real estate.
The new method is intended to minimize the basis disparities between foreign and domestic assets that may arise when taxpayers use adjusted tax basis
to value assets under the TBV method.
As a result of accelerated depreciation, Smith's adjusted tax basis
is now $120,000.
Federal income tax principles), with any amount in excess of such current or accumulated earnings and profits treated as a non-taxable return of capital to the extent of the shareholder's adjusted tax basis
in the holder's shares and with any amount in excess of such current or accumulated earnings and profits and the holder's adjusted tax basis
treated as a capital gain.
Distributions that are classified as returns of capital are nontaxable to the extent they do not exceed a shareholder's adjusted tax basis
in the Company's stock, or as a capital gain to the extent that the amount of the distribution exceeds a shareholder's adjusted tax basis
in the Company's stock.
704(d) provides that a partner's distributive share of loss is allowable to the extent of the partner's adjusted tax basis
in his interest in the partnership at the end of the partnership year in which the loss occurred.
Keep in mind, however, that if you own an interest in a pass-through entity, you can only deduct business losses only to the extent of your adjusted tax basis
, which isn't necessarily equal to the balance in your capital account.