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What is Adjusted Cost Basis?
Adjusted Cost Basis (ABC) is the value of an item for tax purposes, adjusted for depreciation and expenditures.
Sometimes abbreviated ABC, adjusted cost basis is the valuation of an item for tax purposes; that is, if it is to be bought or sold, what gains or losses would be assigned to it? Some business assets are depreciated on a set schedule, such as equipment.
For equipment sold or taken as part of an acquisition a few years after it was purchased, the depreciation factor would reduce the value of the item for tax purposes by perhaps as much as 20% per year. If a company spent significant amounts of money improving a facility, the cost basis of the facility would go up by that amount.
Cost basis accounting also applies to investment accounts, and can be confusing if there are dividend distributions which are reinvested over time. Normally the investment company can offer average cost basis calculations, but individual investors are responsible for keeping up with their own adjusted cost basis, and it helps to have a good accountant.
What are the Expenses Associated with Buying and Owning Mutual Funds?
Several forms of fees and expenses may be charged to those who own, buy, or even sell mutual funds. With mutual funds...
What are the Contribution Limits For My 529 Plan?
Each person can contribute up to the annual gift tax exclusion amount, which in 2016 is $14,000 per beneficiary. 529 plan
How to use the Broadening Bottom (Bullish) Pattern
The Broadening Bottom pattern is formed when a stock price progressively makes higher highs and lower lows
How Do You Mine Ethereum?
When mining on the Ethereum blockchain, you are rewarded in Ether, but you may need to do some calculations to find out it if will be profitable for you
What are Mortgage-Backed Securities?
Mortgage-backed securities (MBS) are products that bundle mortgages together and are traded for sale on the markets
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What are Adjusted Earnings?
Adjusted Earnings, also known as pro forma or non-GAAP earnings, are financial figures derived from a company's income statement that exclude certain items
What is the Advance/Decline Divergence Oscillator?
The advance/decline divergence oscillator tracks the rate of change in the advance-decline line. McClellan Oscillator
What are My SEP IRA Investment Options?
SEP IRA investment choices are determined by the financial institution at which your SEP IRA is established
Is there such a thing as the “January effect?”
The January Effect is a hypothesis which states that stocks will see their biggest monthly gains in January