An asset's adjusted basis is computed as:
A)Original basis + capital improvements − accumulated depreciation.
B)Original basis − capital improvements + accumulated depreciation.
C)Original basis + capital improvements + accumulated depreciation.
D)Original basis + capital improvements + gain or loss realized.
E)None of these

Question

Quizplus · Accepted Answer

The adjusted basis of an asset is its original cost (or other basis) plus any capital improvements made to it, minus any depreciation deducted (or allowable) against that asset over the years. Therefore, option A is the correct answer.

An Asset's Adjusted Basis Is Computed As