1031.Exchange INTELLIGENCE NETWORK
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TAX & BASIS

Adjusted basis

Also called: tax adjusted basis · adjusted tax basis

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PLAIN-ENGLISH DEFINITION

Basis after increases and decreases required by tax rules.

What it means in practice.

Adjusted basis generally reflects items such as capital improvements and depreciation deductions. It is used in determining gain on disposition.

Why it matters.

Owners who do not maintain historical basis records can have difficulty modeling an exchange accurately.

Additional notes.

Adjusted basis generally reflects items such as capital improvements and depreciation deductions. It is used in determining gain on disposition.

PRIMARY / REFERENCE SOURCES

Read the source material.

irs.gov ↗irs.gov/publications/p551
CONNECTED LANGUAGE

Related definitions.

Tax & BasisBasisA tax measure of investment in property used in calculating gain, loss, depreciation and other tax items.Tax & BasisRealized gainThe economic/tax gain generated by the disposition before determining how much is currently recognized.Tax & BasisDepreciationThe tax deduction framework that allocates the cost or other basis of qualifying property over its recovery period.
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