# John purchases a delivery van at an online auction for his new business

You must show your calculations and explain your answer. John purchases a delivery van at an online auction for his new business. Prior to using the van the following cost were incurred. The cost of the van is \$35,000. Shipping costs are \$400.

## John purchases a delivery van at an online auction for his new business

Part 1:

Firstly, John purchases a delivery van at an online auction for his new business. Prior to using the van the following cost were incurred. Also, The cost of the van is \$35,000. Shipping costs are \$400. The van to be paint to make a uniform fleet of vans in which the cost was \$1,000. Sales tax on the van is \$2,500. Shipping insurance was \$200. Lastly, The van was wash for and additional \$25. A tune-up which costs \$200. What is the tax basis of the delivery van?

Secondly, Mary purchased a building to store inventory for her business. The purchase price is \$750,000 and she paid \$3,000 to repair the roof, \$6,000 to make the interior ready for finish goods, and \$500 in legal fees. What is the tax basis of the building to store inventory?

Thirdly, ABC Company bought equipment for its manufacturing plant. The equipment costs \$40,000. The equipment shipping costs \$2,000, the setup fee is \$1,000, and testing the testing fee is \$300. Upon testing, ABC discovers damage to the equipment from shipping. The damage is \$2,000 paid by ABC. What is the tax basis of the equipment?

### Part 2:

Given the following information for Amber Smith, complete Schedule D and form 8949 for 2018.

Firstly, Stock options, which she purchases on February 14 of the current year for \$850, expire on October 1.

Secondly,  On July 1, she sells for \$4,500 her personal-use automobile acquired on March 31, 2010, for \$18,000.

Thirdly, On August 16, she sells for \$3,100 her stock of York Corporation purchased as an investment on February 16, for \$1,600

Fourthly, On March 15, she sells for \$5,600 an antique ring, a gift from her grandmother on January 10, 2004, when its FMV was \$1,600. The ring was purchase by her grandmother on April 2, 1979, for \$1,800.

Lastly, She has an STCL carryover of \$250 from last year.