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:
“Self-alienation is the source of all degradation as well as, on the contrary, the basis of all true elevation. The first step will be a look inward, an isolating contemplation of our self. Whoever remains standing here proceeds only halfway. The second step must be an active look outward, an autonomous, determined observation of the outer world.”
—Novalis [Friedrich Von Hardenberg] (17721801)