The initial adjusted basis of property depends upon how the property is acquired.

Question

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The initial adjusted basis of property is determined by the method of acquisition. For example, if a property is purchased, the initial adjusted basis is the purchase price plus any associated costs such as closing costs, legal fees, and title insurance. If the property is inherited, the initial adjusted basis is the fair market value of the property at the time of the previous owner's death.

The Initial Adjusted Basis of Property Depends Upon How the Property