The acquisition cost of an asset after it has been adjusted to reflect changes in cost basis that result from the occurrence of certain events after the date of acquisition. The cost basis of real estate may be adjusted for depreciation or improvement. Stock dividends, stock splits, and dividends deemed to be returned on capital cause a downward adjustment in the cost basis of a security. Conversely, commissions result in an upward adjustment in the cost basis. Adjusted basis is used in calculating gains and losses for tax purposes.