During the current year,Tony purchased new car wash equipment for use in his service station business.Tony's costs in connection with the new equipment this year were as follows: What is Tony's basis in the car wash equipment?

Question

During the current year,Tony purchased new car wash equipment for use in his service station business.Tony's costs in connection with the new equipment this year were as follows:  What is Tony's basis in the car wash equipment?

Quizplus · Accepted Answer

Tony's basis in the car wash equipment is the sum of all costs needed to acquire and place the equipment in service. This includes the purchase price, sales tax, delivery charges, and installation costs.

Therefore, Tony's basis in the car wash equipment is:
$48,000 (purchase price) + $1,000 (sales tax) + $1,000 (delivery charges) + $2,600 (installation costs) = $52,600

So, the correct choice is C.

During the Current Year,Tony Purchased New Car Wash Equipment for Use