original price of an asset, used in determining depreciation and capital gains or losses. It usually is the purchase price, but in the case of an inheritance it is the market value of the asset at the time of the donor's death.
original price of an asset, used in determining capital gains. It usually is the purchase price, but in the case of an inheritance it is the appraised value of the asset at the time of the donor's death.
the original cost of a building, land, or piece of equipment. With modifications for subsequent capital improvements and depreciation, this becomes the adjusted (tax) basis.
Example: A building was purchased for $1 million, which was its cost basis. Depreciation reduced this over time, resulting in an adjusted tax basis of $800,000.
