Allison buys equipment and pays cash of $50,000, signs a note of $10,000 and assumes a liability on the property for $3,000. In addition, Allison pays an installation cost of $500 and a delivery cost of $800. Allison's basis in the asset is

Question

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Allison's basis in the asset includes all costs incurred to acquire the asset and prepare it for use. This includes the cash paid ($50,000), the note signed ($10,000), the assumed liability ($3,000), the installation cost ($500), and the delivery cost ($800), totaling $64,300.

Allison Buys Equipment and Pays Cash of $50,000, Signs a Note