I am having trouble determining a cost basis for some property a client bought at auction.
They purchased nearly $400,000 worth of machinery at auction, but do have a value for each individual item. There are probally 30 pieces of equipment, but most of the cost is from 10-12 items. We can determine a FMV for each item on the purchase date, which is signifantly more than the purchase price. Would it be acceptable to determine, based on FMV, a percentage of the purchase price for each asset and apply that to the price of each item?
For example-
Press Machine has FMV of $150,000 on purchase date. Total FMV of all equipment is $600,000. Can we take 1/4 of purchase price and attach it to press ($125,000)?
They purchased nearly $400,000 worth of machinery at auction, but do have a value for each individual item. There are probally 30 pieces of equipment, but most of the cost is from 10-12 items. We can determine a FMV for each item on the purchase date, which is signifantly more than the purchase price. Would it be acceptable to determine, based on FMV, a percentage of the purchase price for each asset and apply that to the price of each item?
For example-
Press Machine has FMV of $150,000 on purchase date. Total FMV of all equipment is $600,000. Can we take 1/4 of purchase price and attach it to press ($125,000)?
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