wift, LLC purchased equipment (7-year property) for use in its business on October 15, 2021. This was the only asset Swift, LLC acquired during 2021. The cost of the equipment was $2,000,000. In addition to the purchase price, Swift, LLC incurred the following additional costs related to the equipment in 2021: $20,000 to ship the equipment to Swift LLC’s business location in Chicago, Illinois; $10,000 for installation costs to get the equipment operational in Swift LLC’s business; $120,000 for sales tax on the purchase of the equipment; $50,000 for an annual tune up on the equipment Assuming that Swift, LLC continues to own the equipment, what will the company’s adjusted tax basis in the equipment be at December 31, 2024? Answer:
Swift, LLC purchased equipment (7-year property) for use in its business on October 15, 2021. This was the only asset Swift, LLC acquired during 2021. The cost of the equipment was $2,000,000. In addition to the purchase price, Swift, LLC incurred the following additional costs related to the equipment in 2021:
$20,000 to ship the equipment to Swift LLC’s business location in Chicago, Illinois;
$10,000 for installation costs to get the equipment operational in Swift LLC’s business;
$120,000 for sales tax on the purchase of the equipment;
$50,000 for an annual tune up on the equipment
Assuming that Swift, LLC continues to own the equipment, what will the company’s adjusted tax basis in the equipment be at December 31, 2024?
Answer:
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