What is the difference between cost basis and adjusted cost basis, and how do they impact the calculation of capital gains or losses?

The cost basis is the original price paid for an investment, while the adjusted cost basis includes any adjustments made to the original cost. These adjustments can include things like dividends, stock splits, or capital improvements. The adjusted cost basis is used to calculate capital gains or losses when selling an investment, as it affects the amount of profit or loss realized from the sale.