adjusted basis

Definition of "adjusted basis"
  1. The modified value of an asset, taking into account its initial cost and various factors such as improvements made, depreciation, damage, and other events that may have altered its worth during ownership. It plays a crucial role in determining income tax on capital gains, as its value is usually more than the initial cost and thereby reduces the taxable capital gains
How to use "adjusted basis" in a sentence
  1. After calculating all the improvements made on the property over the years, the owner found the adjusted basis of his property to be considerably higher than its purchase price.
  2. The accountant calculated the adjusted basis of the vehicle by taking depreciation into consideration.
  3. With the help of her financial advisor, she managed to lower her capital gains tax by determining the adjusted basis of her stocks.

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