Property that has been converted from personal use to business or income-producing use will be dual basis property if the adjusted basis exceeds the fair market value at the date of conversion.

Question

Quizplus · Accepted Answer

When property is converted from personal use to business use, it becomes dual basis property if its adjusted basis is higher than its fair market value at the time of conversion. This means it has one basis for determining loss and another for determining gain.

Property That Has Been Converted from Personal Use to Business