If property is converted from personal-use property to business property,the depreciable cost basis is which of the following?
A)Cost of the asset.
B)The cost of a new similar asset at the date of conversion.
C)FMV of the asset.
D)The lower of the cost or FMV at the date of conversion.

Question

Quizplus · Accepted Answer

When property is converted from personal-use property to business property, the depreciable cost basis is the lower of the cost or fair market value of the asset at the date of conversion. This is because the asset may have significantly depreciated in value while being used for personal purposes, and the lower of the cost or fair market value better reflects the actual value of the asset at the time it began being used for business purposes.

If Property Is Converted from Personal-Use Property to Business Property,the