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Level 5
March 15, 2021
Solved

Purchase rebate

  • March 15, 2021
  • 1 reply
  • 16 views

A client purchased a new truck for $X from a dealership. The client paid $X minus $Y (manufacture’s rebate) = $Z. For the purpose of depreciation, should we add the rebate as income and depreciate full purchase price $X or should we enter purchase price less rebate $Z as asset cost? This is a 1065 which means I have to balance the books.

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Best answer by sjrcpa

Cost = Z = depreciable basis.

1 reply

sjrcpa
sjrcpaAnswer
Level 15
March 15, 2021

Cost = Z = depreciable basis.

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