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Finance Calc Kit
Real estate

Adjusted Basis Calculator

Calculate the adjusted basis of real estate property by adding capital improvements and subtracting accumulated depreciation from the purchase price.

Property basis inputs

$
$
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Adjusted Basis

$260,000.00

Basis summary

Purchase price$250,000.00
+ Capital improvements+$40,000.00
- Accumulated depreciation-$30,000.00
Adjusted basis$260,000.00

Adjusted basis is used to determine taxable gain or loss when selling property. Sale price minus adjusted basis equals the taxable capital gain.

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What is adjusted basis?

Adjusted basis is the IRS-recognized cost of an asset for tax purposes. It starts with the original purchase price, increases with qualifying capital improvements, and decreases with depreciation claimed over the holding period. When you sell, the difference between sale price and adjusted basis determines your taxable capital gain or loss.

Use this calculator to solve for any variable in the basis formula. For a quick sale gain before tax brackets, try the gain on sale calculator. For deferring gain through a like-kind swap, open the 1031 exchange calculator. To estimate tax on a taxable sale, try the capital gains calculator.

Adjusted basis formula

Adjusted Basis=Purchase Price+Capital Improvements−Accumulated Depreciation\text{Adjusted Basis} = \text{Purchase Price} + \text{Capital Improvements} - \text{Accumulated Depreciation}

Worked example: rental property basis

  1. Purchase price: $250,000
  2. Capital improvements: $40,000 kitchen remodel
  3. Accumulated depreciation: $30,000 over several years
  4. Adjusted basis: $250,000 + $40,000 - $30,000 = $260,000
  5. Taxable gain at $320,000 sale: $320,000 - $260,000 = $60,000

What counts as a capital improvement?

  • Structural additions such as a new room, bathroom, or garage
  • Major system replacements including roof, HVAC, or electrical panel
  • Renovations like kitchen remodels, bathroom upgrades, or new flooring
  • Exterior improvements such as driveways, retaining walls, or fencing

Routine maintenance and minor repairs such as painting or faucet fixes do not increase basis.

Frequently asked questions

What is the difference between cost basis and adjusted basis?
Cost basis is the original purchase price plus certain acquisition costs. Adjusted basis adds capital improvements and subtracts depreciation. Adjusted basis is the figure used at sale.
Does adjusted basis apply to primary residences?
Yes, but depreciation does not apply to a primary home. Adjusted basis includes purchase price plus capital improvements. Home sale gain exclusions apply separately under current tax law.
How do I track capital improvements?
Keep receipts, contracts, and permits for every improvement project. Maintain a spreadsheet with date, description, and cost for each project.
What happens to adjusted basis in a 1031 exchange?
The adjusted basis of the relinquished property carries over to the replacement property. Any boot received or debt reduction may be taxable in the exchange year.
Is land depreciated for adjusted basis?
No. Land is not depreciable. Allocate the purchase price between the building (depreciable) and land (non-depreciable) when calculating depreciation.
Are the results stored?
No. All math runs in your browser. Changing fields only updates the page URL.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.