What does it mean when a property has a good adjusted basis?

Having a good adjusted basis means that the property has undergone significant renovations and improvements. The adjusted basis takes into account the original purchase price, plus any additional costs that enhance the value of the property, such as renovations, repairs, and other capital expenditures. This adjusted basis is important for calculating capital gains tax when the property is sold.

When a property has significant renovations, it indicates that the overall value is likely increased and can lead to a higher adjusted basis. This helps in ensuring that the owner receives appropriate tax considerations, as the improvements are seen as investments that add to the property's worth over time.

While other factors, such as market value trends or depreciation, can affect a property's overall assessment and profitability, they do not directly define what constitutes a "good adjusted basis." Hence, the focus here is on the enhancement of the property's value through improvements, which fundamentally raises its adjusted basis.