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 an annual registration fee of $200; wash and detailing for $50; and routine maintenance for $250.What is Jose�s cost basis for the delivery van?

Answer 1

Answer:

Cost basis= $29,150

Explanation:

Cost basis refers to the initial purchase price of an asset that is used for tax purposes. It is the initial amount invested in an asset in addition to any commission's or fees.

Capital gains is the difference between the sale price and the the cost basis of an asset.

Tracking cost basis is necessary for determining the success of an investment and also for tax purposes.

We will sum the following to get the cost basis

Purchase price= $24,500

Shipping cost= $650

Paint= $1,000

Sales tax= $3,000

Cost basis= 24,500+ 650+ 1,000+ 3,000

Cost basis= $29,150