ColeenD3
Expert Alumni

Deductions & credits

Yes you include all costs necessary to acquire the car (this would include any sales taxes or fees) in the basis of your new car. If you received a rebate, this is a cost you did not incur and would not be included. The service contract is an option and not included in the price. That portion of sales tax is also not included.

 

Most contracts separate out the sales tax and make it easy for you.