On July 9, 2008, Tom Purchased a Computer (Five-Year Property

question 20

Essay

On July 9, 2008, Tom purchased a computer (five-year property for MACRS purposes)for $6,000, which he used in his sole proprietorship. He claimed $1,200 (0.20 × $6,000)of depreciation for 2008. On February 9, 2009, he transfers the computer and other assets of his sole proprietorship to Brewer Corporation in exchange for Brewer stock in a transfer qualifying under Sec. 351. What is the amount of depreciation for 2008 claimed by Tom? What is the amount of depreciation for 2009 claimed by Brewer Corporation? What is Brewer's basis in the computer on the date of transfer?

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Definitions:

Newly Created Stoma

A newly surgically created opening on the body surface to divert bodily functions, such as waste excretion or breathing.

Preterm Infant

An infant born before 37 completed weeks of gestation, often requiring specialized care due to underdeveloped organs and systems.

Neonatal Intensive Care Unit

A specialized department in a hospital that provides critical care for newborn infants with serious health issues.

Multiple Stomas

The presence of more than one surgically created opening in the body to allow for the passage of bodily waste.