Adjusted Basis

See Cost Basis.

Adjusted basis refers to the cost basis of the seller of a thing when the seller sells the thing for cash. That is, the home might have cost the seller $300,000.

They sold it for $500,000. In theory, the basis of $300,000 would then deliver a taxable gain of $200,000. But there was commission, closing costs, and other fees, such that another $20,000 in costs had to be tacked on before profits were actually calculated for tax purposes. In this case, the adjusted basis was $320,000 and not $300,000, so the taxable $180,000 hurts slightly less.