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Timothy Purchased a New Computer for His Consulting Practice on October

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Essay

Timothy purchased a new computer for his consulting practice on October 15 th 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 deduction with respect to the computer during the current year?


Definitions:

Cease-and-Desist Order

A legal order issued by a government agency or court directing a person or entity to stop an alleged illegal activity.

Administrative Complaint

A formal accusation filed by a governmental authority regarding violations of laws or regulations.

Federal Trade Commission

A U.S. government agency whose primary purpose is to enforce antitrust and consumer protection laws.

Cease-and-Desist Order

A legal order issued by a court or government authority demanding that an individual or organization stop a specified activity immediately.

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