Cosmo Inc. paid $15,000 plus $825 sales tax and $200 delivery charge for a new business asset. Cosmo's tax basis in the asset is $15,200, and it can deduct the sales tax.

Question

Quizplus · Accepted Answer

Cosmo's tax basis in the asset is $16,025 ($15,000 purchase price + $825 sales tax + $200 delivery charge), and it can include both the sales tax and delivery charge in the basis of the asset for depreciation purposes.

Cosmo Inc Paid $15,000 Plus $825 Sales Tax and $200 Delivery