What is Adjusted Basis?

Legal Definition
In tax accounting, adjusted basis is the net cost of an asset after adjusting for various tax-related items.

Adjusted Basis or Adjusted Tax Basis refers to the original cost or other basis of property, reduced by depreciation deductions and increased by capital expenditures.

Example: Brad buys a lot for $100,000. He then erects a retail facility for $600,000, then depreciates the improvements for tax purposes at the rate of $15,000 per year. After three years his adjusted tax basis is $655,000 [$100,000 + $600,000 - (3 x $15,000)].

Adjusted basis is one of two variables in the formula used to compute gains and losses when determining gross income for tax purposes. The Amount Realized – Adjusted Basis tells the amount of Realized Gain (if positive) or Realized Loss (if negative).
-- Wikipedia
Legal Definition
The base price used to determine capital gains or losses on an investment, generally including a deduction for commissions at the time of purchase or sale, along with adjustments for any STOCK SPLITS that may have occurred.