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Adjusted Basis
Adjusted basis is your basis increased or decreased by certain amounts.
Increases to basis: These include any additions and other improvements that have a useful life of more than 1 year, special assessments for local improvements, and amounts you spent after a casualty to restore damaged property. Your home’s adjusted basis does not include the cost of any improvements that are replaced and are no longer part of the home nor does it include repairs. Examples of additions and other improvements:
Additions Bedroom Bathroom Deck Garage Porch Patio |
Heating & Air Conditioning Heating system Central air conditioning Furnace Duct work Central humidifier Filtration system |
Lawn & Grounds Landscaping Driveway Walkway Fence Retaining wall Sprinkler system Swimming poolMiscellaneous Storm windows, doors New roof Central vacuum Wiring upgrades Satellite dish Security system |
Plumbing Septic system Water heater Soft water system Filtration systemInterior Improvements Built-in appliances Kitchen modernization Flooring Wall-to-wall carpetingInsulation Attic Walls Floors Pipes and duct work |
Decreases to basis: These include, for example, any gain you postponed from the sale of a previous home before May 7, 1997, deductible casualty losses, depreciation allowed or allowable if you used your home for business or rental purposes, etc.