The basis for a personal use asset converted to business use is the lesser of the asset's cost basis or fair market value on the date of the transfer or conversion.

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According to IRS Publication 946, the basis of a personal use asset converted to business use is the lesser of its cost basis or its fair market value on the date of the conversion or transfer. This is also known as the "basis in the hands of the acquiring business."

The Basis for a Personal Use Asset Converted to Business