Cosmo Inc.paid $15,000 plus $825 sales tax plus a $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 should include the purchase price, sales tax, and delivery charge, totaling $16,025. Sales tax is generally included in the asset's basis and not separately deductible.

Cosmo IncPaid $15,000 Plus $825 Sales Tax Plus a $200 Delivery