Publication 598 |
2001 Tax Year |
Average Adjusted Basis
The average adjusted basis of debt-financed property is the average
of the adjusted basis of the property as of the first day and as of
the last day that the organization holds the property during the tax
year.
Determining the average adjusted basis of the debt-financed
property is not affected if the organization was exempt from tax for
prior tax years. The basis of the property must be adjusted properly
for the entire period after the property was acquired. As an example,
adjustment must be made for depreciation during all prior tax years
whether or not the organization was tax-exempt. If only part of the
depreciation allowance may be taken into account in computing the
percentage of deductions allowable for each debt-financed property,
that does not affect the amount of the depreciation adjustment to use
in determining average adjusted basis.
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