Question

Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $24,500. In addition, Jose incurred the following expenses before using the van: shipping costs of $650; paint to match the other fleet vehicles at a cost of $1,000; registration costs of $3,200, which included $3,000 of sales tax and a registration fee of $200; wash and detailing for $50; and an engine tune-up for $250.

What is Jose’s cost basis for the delivery van?

Answer 1

24,500 + 650 + 1000 + 3000 = 29,150 < == cost basis

registration fee, washing and detailing, and engine tune-ups are costs for repair and maintenance and are not included in ur cost basis

Answer 2

$29,150

Explanation:

Cost basis of purchased vehicle includes the Price, sales tax, freight charges and even installation charges if you add some equipment.

Jose's cost basis for the delivery van

Price + shipping + paint + sales tax

24,500 + 650 + 1000 + 3000 = $29,150

It does not include registration fee, wash and detailing and engine tune-up.

Therefore, Jose's cost basis for the delivery van is $29,150.