1. What Is Unadjusted Basis Immediately After Acquisition?

Unadjusted Basis Immediately After Acquisition (UBIA) refers to the cost basis of qualified property immediately after it is placed in service for purposes of the QBI (Qualified Business Income) deduction under Section 199A of the Internal Revenue Code.

2. How Does The Calculator Work?

The calculator uses the UBIA formula:

Where:

• \( Cost\ Basis \) — The original purchase price plus any capital improvements made to the property before it was placed in service

Explanation: UBIA represents the unadjusted basis of qualified property at the time it is first placed in service, before any depreciation deductions are taken.

3. Importance Of UBIA Calculation

Details: Accurate UBIA calculation is crucial for determining the QBI deduction limitation based on qualified property. It helps taxpayers maximize their Section 199A deduction while remaining compliant with IRS regulations.

4. Using The Calculator

Tips: Enter the cost basis immediately after acquisition in dollars. This should include the purchase price plus any capital improvements made before the property was placed in service.

5. Frequently Asked Questions (FAQ)

Q1: What qualifies as "qualified property" for UBIA?
A: Qualified property includes tangible property subject to depreciation that is held by and available for use in a qualified trade or business at the close of the tax year.

Q2: Does UBIA include land value?
A: No, UBIA typically excludes land value as land is not depreciable property. It includes only the depreciable basis of qualified property.

Q3: How is UBIA different from adjusted basis?
A: UBIA is the basis before any depreciation deductions, while adjusted basis reflects reductions for depreciation already taken.

Q4: What types of improvements are included in UBIA?
A: Capital improvements made before the property is placed in service, such as building renovations, equipment installations, and other substantial improvements that increase the property's value.

Q5: Can UBIA be adjusted after acquisition?
A: UBIA is generally fixed at the time the property is placed in service, though certain circumstances like significant improvements may require recalculation.