An adjusted basis, or adjusted tax basis, refers to the original cost or other basis of property, reduced by depreciation deductions and increased by capital expenditures. It serves as the base amount from which to measure gains and losses for tax purposes.
The adjusted tax basis is the value used for calculating gain or loss upon the sale or disposition of an asset, reflecting adjustments for various tax-related incentives, improvements, or expenses.
Cost depletion refers to the method used to recover the tax basis in a mineral deposit by deducting it proportionately over the productive life of the deposit. It is contrasted with the percentage depletion method.
Mortgage relief refers to the reduction or elimination of mortgage debt on a property, frequently through the assumption of mortgage by another party or debt retirement. In specific transactions like tax-free exchanges, mortgage relief can trigger taxable gains.
The stepped-up basis is a method to adjust the valuation of property inherited from a decedent to its fair market value as of the date of the decedent's death.
The concept of substituted basis is crucial in taxation, especially when dealing with property that has either an exchanged basis or a transferred basis. It helps in determining the tax implications of property transfers and exchanges.
Tax basis refers to the value used for tax purposes to determine the gain or loss on the sale or transfer of an asset, and it includes various adjustments over time.
