What is the Adjusted Tax Basis?

Also called adjusted cost basis, the adjusted tax basis is the net book value of a property. Real estate investors need to know and use the adjusted tax basis to calculate their capital gain or loss.

This calculation begins with the basis (original purchase price) and buying expenses incurred with original purchase. Any capital improvements made since the purchase and buying expenses are added to that original basis. Then all depreciation taken for tax-related deductions are then subtracted from that amount to arrive at the adjusted tax basis.

When the property is sold, the capital gains tax is calculated as the new sales price minus the tax basis.

For more information, see also the following entries:

• :Basis:
• :Book Value:
• :Capital Gain:
• :Capital Gain Tax:
• epreciation:
• :Improvements:
• :Investment Property:
• urchase Price:
• :Real Estate:
• :Real Property:
• :Tax Basis:
• :Tax Deduction: