Your purchase price is the starting amount of your cost basis, which actually changed over time. For instance, if you made any improvements to the property, that amount should be added. Likewise, if you deducted any depreciation while you owned that property, that should be subtracted. Therefore, to find your final cost basis, or what we call the adjusted basis, take the original purchase price plus any improvements and less any depreciation.
Original Purchase Price + Improvements – Depreciation = Net Adjusted Basis