Timothy Purchased a New Computer for His Consulting Practice on October

question 78

Essay

Timothy purchased a new computer for his consulting practice on October 15th of the current year.The basis of the computer was $4,000. During the Thanksgiving holiday, he decided the computer didn't meet his business needs and gave it to his college-aged son in another state. The computer was never used for business purposes again. Timothy had $50,000 of taxable income before depreciation. What is Timothy's total cost recovery expense with respect to the computer during the current year?

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Definitions:

Indirect Price Discrimination

A pricing strategy where the price variance does not directly relate to cost differences but is based on different consumer groups' ability or willingness to pay.

Willingness To Pay

The maximum amount an individual is prepared to spend to procure a good or service, reflecting its perceived value to them.

Consumer Surplus

The disparity between the amount consumers are prepared to spend on a good or service and the actual price they incur.

High-End Wok

A premium quality wok designed for superior cooking performance, often made with high-grade materials and targeting upscale markets.