Calculation
Adjusted basis is calculated by beginning with an asset's original cost basis, and then making adjustments. Adjusted basis is calculated as follows:
- Purchase costs (title & escrow fees, broker commissions, shipping, sales tax, etc.)
- Improvements (rehabilitation expenses & substantial repairs)
- Legal fees (to defend or to perfect title to the property, zoning costs, etc.)
- Selling costs (title & escrow fees, broker commissions, shipping, transfer fees, etc.)
Minus the costs represented by:
- Accumulated depreciation, depletion, or amortization
- Casualty or theft Loss
- Other decreases to basis
Read more about this topic: Adjusted Basis
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