Question Five: Barry Allen forms a new corporation with him as the sole shareholder. He transfers equipment that he bought for $200,000. The note still owing on the equipment is $75,000. He utilized Section 179 and bonus depreciation on the equipment, so his basis is zero. FMV is still real close to the $200,000 purchase price. This is all he transfers, and he takes 1,000 shares back. Any problems and if so how to fix.

Question Six: Eartha Kitt invested $100,000 in her brothers business two years ago. This business has now gone out of business, how much can Eartha write off this year and if any left what can see write off in the future and how. Discuss long-term vs. short term and let me know any other assumptions that you might have made to make your determination. By the way, two years ago at the time of the investment, Earthas husband Bobba was alive. He died last year

(please USA tax rule)