Question

a new machine with a purchase price of $109,000, with transportation costs of $12,000, installation costs of $5,000, and special acquisition fees of $6,000, would have a cost basis of:

Answer 1

Based on the information given the cost basis is $132,000.

Using this formula

Cost basis=Purchases price+ Transportation costs + Installation costs +  Special acquisition fees

Where:

Purchases price=$109,000

Transportation costs=$12,000

Installation costs=$5,000

Special acquisition fees=$6,000

Let plug in the formula

Cost basis=$109,000+$12,000+$5,000+$6,000

Cost basis=$132,000

Inconclusion the cost basis is $132,000.

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