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Tax Basis Roll Forward Calculator

Track basis year by year for exit planning.

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Ending basis

$5,200,000

Total depreciation

$2,200,000

Net basis change

-$2,800,000

How the math works

Ending basis = starting + improvements − depreciation − distributions.

$8M + $800k − $2.2M − $1.4M = $5.2M ending basis. $2.8M reduction — driving higher gain at exit.

How to Use

  1. Enter starting basis.
  2. Enter years held.
  3. Enter annual depreciation.
  4. Enter capital improvements added.
  5. Enter distributions taken.
  6. Read ending basis.

Frequently Asked Questions

What is basis?

Initial cost + improvements + preferred return allocated − depreciation − distributions. Determines taxable gain at exit: sale price − basis = gain. Basis can go negative (partnership distributions exceeding basis), triggering gain.

Common mistakes?

Ignoring improvements (added to basis, not expensed). Forgetting to deduct distributions (reduce basis). Missing depreciation adjustments. Tracking on partnership interest separately from underlying real estate basis. Keep detailed basis records yearly.

Planning?

Low basis = high gain = high tax. Strategies: 1031 (carries forward with adjustment), installment sale, QOZ, estate planning (step-up). Track carefully to avoid negative basis (distributions exceeding capital account) — triggers taxable event.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.

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