60k. S1016. 0. There has been no realized gain. There must be a sale or other disposition S1001(a) Joe bought it for 25, improved for 35k, and sold for 150. 150 (1001b) - 60k (1016(a)(1) = 90k Adjusted basis = 25(1012) + 35 + 50(1016(a)(1)) = 110k(1011) There is a loss. Total basis is greater than the amount realized. If it's personal property then TP can't write it off, if it's business or other property TP may be able to realize a loss and get a tax write off.