Asset Adjusted Basis Calculator

Formula

The formula to calculate the Asset Adjusted Basis (AAB) is:

\[ \text{AAB} = \text{AC} - \text{AD} + \text{AI} \]

Where:

Asset Adjusted Basis: The original cost of an asset, including any improvements made to it, adjusted for factors such as depreciation or amortization. This value is used to calculate the taxable gain or loss when the asset is sold.
Asset Cost (AC): The initial purchase price of the asset.
Accumulated Depreciation (AD): The total depreciation expense that has been recorded for the asset over its useful life.
Asset Improvements (AI): The cost of any improvements made to the asset that increase its value.

Let's say the asset cost is $50,000, the accumulated depreciation is $10,000, and the asset improvements are $5,000. Using the formula:

\[ \text{AAB} = 50000 - 10000 + 5000 \]

We get:

\[ \text{AAB} = 45000 \]

So, the Asset Adjusted Basis is $45,000.