A loss from the sale of a personal use asset that would be disallowed can be recognized if the taxpayer converts the asset to business use prior to its sale.

Question

Quizplus · Accepted Answer

A loss from the sale of a personal use asset is generally disallowed, even if the asset is converted to business use prior to its sale. The loss is not recognized because the asset's basis for loss purposes is the lower of its adjusted basis or fair market value at the time of conversion.

A Loss from the Sale of a Personal Use Asset