Adjustments To Basis
The tax basis of an asset subject to cost recovery must be reduced by deductions allowed for such cost recovery. For example, if Joe claimed $25,000 of depreciation deductions on his building, his adjusted basis would be the $90,000 as above less $25,000, or $65,000. Cost recovery deductions may include depreciation, amortization, and deducted losses or declines in value. Some jurisdictions (e.g., Germany) allow a deduction for decline in value of certain assets, which reduces tax basis.
Read more about this topic: Tax Basis
Famous quotes containing the word basis:
“Independence I have long considered as the grand blessing of life, the basis of every virtue; and independence I will ever secure by contracting my wants, though I were to live on a barren heath.”
—Mary Wollstonecraft (1759–1797)