Could bond premium amortization, a corporate distribution to a shareholder treated as a return of capital in which gain is recognized to the shareholder, and depreciation cause a decrease to the adjusted basis? The only thing that I thought could cause the decrease is just the depreciation,but not 100% sure. Thanks!

A return of capital, if in fact it causes the bond principle to go down, can decrease basis on a bond.

Even though the capital return is recognized as a gain by the shareholder, the capital return would still cause the basis to decrease? Very interesting. Thanks!

Yes, life IS a sometimes when it comes to taxes.

Glad to help!