What term is used to describe the basis of an item of property for figuring gain on a sale without considering earlier depreciation?

The term that describes the basis of an item of property for calculating gain on a sale, without taking into account any earlier depreciation, is referred to as the unadjusted basis. This basis represents the original cost of the property, which includes the purchase price and any additional costs associated with acquiring the asset, such as fees and taxes.

In the context of property sales, the unadjusted basis is crucial for determining the gain or loss when the property is sold. By using the unadjusted basis, you maintain a clear view of the initial investment in the property prior to any depreciation adjustments that may have been taken in subsequent tax years.

Other terms like cost basis and adjusted basis have specific definitions that involve alterations made to the original basis. The fair market value pertains to the price at which the property would sell on the open market and does not directly relate to the basis for calculating tax implications. Understanding these distinctions is essential for accurate tax reporting and compliance.