Definition
The original cost of a property plus capital improvements, minus depreciation taken and certain other adjustments.
Example
A $310,000 purchase plus a $40,000 addition minus $55,000 of depreciation gives an adjusted basis of $295,000.
Related terms
- Assessed Value
- Cost Segregation
- Depreciation
- Depreciation Recapture
- Exchange Accommodation Titleholder
- Homestead Exemption
Frequently asked questions
What does Adjusted Basis mean in real estate?
The original cost of a property plus capital improvements, minus depreciation taken and certain other adjustments.
How is Adjusted Basis used in practice?
A $310,000 purchase plus a $40,000 addition minus $55,000 of depreciation gives an adjusted basis of $295,000.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.