Finance category

Mortgage, loan, investing, tax, and money calculators.

Tax Basis Adjustment Calculator

Cost basis in real estate isn't static. It goes up for capital improvements, down for depreciation, and gets partially transferred when you do a 1031 exchange. A wrong basis number at sale can cost or save tens of thousands in capital gains tax. This calculator tracks it properly.

Original purchase cost

Acquisition costs (title, legal, survey)

Cumulative capital improvements

Accumulated depreciation

1031 deferred gain carried in

Target sale price

Sale costs %

Blended cap-gain rate %

Fed + state + NIIT

Depreciation recapture rate %

Estimated total federal tax

$46,510

Net to seller (before state)

$404,540

Adjusted basis

$235,500

Total gain

$215,550

Depreciation recapture portion

$68,000

Capital gain portion

$147,550

Recapture tax @ 25%

$17,000

Cap-gain tax

$29,510

Realized amount (after sale costs)

$451,050

How the math works

Adjusted basis = original cost + acquisition costs + capital improvements − accumulated depreciation − deferred 1031 gain. On $250K original + $8.5K acq + $45K improvements − $68K depreciation = $235.5K adjusted basis. Sale at $485K, after 7% costs = $450,950 realized. Gain $215,450 — $68K recaptured at 25% = $17K, $147,450 cap gain at 20% = $29,490. Total federal tax $46,490.

Track basis in a spreadsheet from day one. Keep receipts for every capital improvement. At sale, errors in basis tracking cost more than years of CPA fees.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.

Learn more about our review process on the EveryCalc methodology page.

How this calculator works

What this page estimates

This Tax Basis Adjustment Calculator is built to give a quick, browser-based estimate for tax basis adjustment. Cost basis in real estate isn't static. It goes up for capital improvements, down for depreciation, and gets partially transferred when you do a 1031 exchange. A wrong basis number at sale can cost or save tens of thousands in capital gains tax. This calculator tracks it properly. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.

Example workflow

For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.

Practical checks

Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
Run a low, base, and high case when the inputs are estimates.
Check the related calculators below when the next decision depends on a different assumption.

How to interpret the tax basis adjustment result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

Cross-check

Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.

Watch for

Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.

This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.

Before relying on this tax basis adjustment estimate

Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.

Confirm source numbers

Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.

Separate cash flow from total cost

A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.

Run conservative cases

Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.

Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.

How to Use

Enter original purchase cost plus acquisition costs (title, closing, survey).
Add cumulative capital improvements (not repairs — real improvements).
Enter accumulated depreciation taken on investment property.
Enter any 1031-deferred gain rolled in from a prior exchange.
See adjusted basis, gain if sold at your target price, and federal + state tax liability estimate.

Frequently Asked Questions

What counts as capital improvement?

Items that add value, prolong life, or adapt to new use: new roof, HVAC replacement, room addition, kitchen/bath remodel. NOT capital: painting, carpet replacement, repair work, patches. Capitalization follows the IRS 'BRA' test — Betterment, Restoration, Adaptation.

How does depreciation affect basis?

Residential rental property is depreciated over 27.5 years. Each year reduces basis by ~3.64% of the original building value (not land). At sale, accumulated depreciation gets 'recaptured' at up to 25% (higher than cap-gain rate), regardless of actual sale price.

What's 1031 carried basis?

In a 1031 exchange, the basis of your new property = old basis − gain deferred. If your old property had $80K basis and you deferred $120K gain buying a $400K replacement, new basis is $280K. Subsequent depreciation continues from that reduced basis — known as 'carryover basis.'

Is the capital gain calc simple?

No. Federal long-term cap gain (0%, 15%, or 20% based on income), plus 3.8% NIIT on high earners, plus state cap-gain tax (varies 0-13.3%), plus depreciation recapture at 25%. This calculator approximates the blended rate; for real decisions, use a CPA.