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.

Question

Quizplus · Accepted Answer

This is correct according to IRS regulations regarding the conversion of personal-use assets to business use. The tax deduction for the converted asset is based on the lesser of its cost basis or fair market value on the date of conversion.

The Basis for a Personal-Use Asset Converted to Business Use