Item auctioned with American flower (5)
I believe the answer is:
lotus
'flower' is the definition.
(I know that Lotus is a type of flower)
'item auctioned with american' is the wordplay.
'item auctioned' becomes 'lot' (lot can mean an item up for sale at an auction).
'with' says to put letters next to each other.
'american' becomes 'us' (abbreviation for United States).
'lot'+'us'='LOTUS'
(Other definitions for lotus that I've seen before include "Water lily - fruit inducing forgetfulness" , "Mythological fruit - lily" , "Reason for forgetfulness" , "Sacred Egyptian water lily" , "In Greek mythology, a fruit which induces forgetfulness" .)