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:

Social Impact Bond

A financial instrument that raises private investment to fund public or social services, with returns to investors contingent on achieving predetermined social outcomes.

Direct Funding

Direct funding refers to the allocation of financial resources directly to a specific project, program, or organization without intermediaries.

Organization

An entity, such as a company, government body or nonprofit, composed of individuals working together to achieve common goals or perform specific functions.

Reimbursement Basis

A payment method where expenses are paid back after they have been incurred, often used in contracts and employment agreements.