Final answer:
The unadjusted basis in federal income tax refers to the original cost of the property including associated purchase expenses, without considering depreciation or improvements made over time.
Step-by-step explanation:
In determining gain or loss on real property acquired by purchase, for federal income tax purposes, the term "unadjusted basis" most nearly means the cost of the property as it was originally purchased, without any adjustments for depreciation or improvements.
This figure is used to calculate the capital gains or losses upon the sale of the property, by comparing the property's selling price to its unadjusted basis.
The unadjusted basis usually includes the purchase price of the property, as well as any expenses incurred during the purchase such as legal fees, recording fees, surveying fees and any other costs directly attributable to the acquisition of the property.