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)FMV of the asset.
C)The cost of a new similar asset at the date of conversion.
D)The lower of the cost or FMV at the date of conversion.

Question

Quizplus · Accepted Answer

The depreciable cost basis for property converted from personal-use property to business property is the lower of the cost or fair market value (FMV) of the asset at the date of conversion. This is because the asset has already been subject to depreciation while being used as personal-use property. Therefore, the cost basis may be lower than the FMV of the asset.

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