Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
50% - Moderately

Adjusted Cost Basis

Synonyms:actual value, balance sheet, computation
Filed Under: financial-banking, insurance
Tags: banking, insurance

Definition of adjusted cost basis

adjusted cost basis
1. To calculate the "Adjusted Cost Basis," take the amount paid for the item, plus the amount paid for improvements, and then subtract the losses and depreciation. The profit or loss is determined when the owner sells the item, and determines the difference between the sale price and the adjusted cost basis.

Related Terms and Acronyms:

  • actual cash value (ACV)   The replacement cost of an insured asset with depreciation accounted for.
  • appreciation   An increase in the value of a property or item.
  • basis   That on which a thing rests or is founded.
  • gross profit margin   The difference between the sales your business generates and the costs you pay out for goods.
  • income approach   A step in the valuation process of an income property. The value is reached by estimating the annual income minus an allowance for vacancies and bad debts and then subtracting annual operating expenses, real estate taxes, and insurance premiums to obtain the net operating income. This is then converted by capitalization into a capital value.
  • median price   In a given area, the amount paid for a house in which half of the houses in that area sell for less and half sell for more.
  • rate of return (ROR, RR)   The profit an investment generates, expressed as equity divided by cash flow.
  • return on investment (ROI)   The profit an investment generates, expressed as equity divided by cash flow.

Search the Glossary

Not All Brokers Offer Great Rates
The majority of brokers in Canada limit themselves to using a small network of lenders. We however, have access to dozens of lenders and the lowest mortgage rates in Canada.
Mortgage Rates
Mortgage Rates
Just a small difference in rates can save you tens of thousands of dollars on your mortgage, so now just imagine what an even bigger difference will do. Take advantage of our very low mortgage rates and apply today.
Mortgage Rates
Best Mortgage Calculator
We pulled out all the stops and built the mortgage calculator you've all been dreaming of. Charts and graphs, side-by-side mortgage comparisons, lump sum payments, and more have all been added on top of a calculator that the Globe and Mail already considers the best on the internet. Try it now!
Best Mortgage Calc