Definition: The tax amount assigned to an asset, generally starting with cost for purchased property and determined under different rules for some other acquisitions.
Example
A buyer's initial basis generally includes the purchase price and qualifying acquisition costs.
Keep the distinction clear
Adjusted basis reflects later increases or decreases, such as improvements or depreciation. Basis is not automatically current market value or the mortgage balance.
Related terms
Adjusted Basis · Capital Gain · Depreciation
Keep studying
References: IRS Topic 703: basis of assets
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