Beulah's personal residence has an adjusted basis of $450,000 and a fair market value of $390,000.Beulah converts the property to rental use on November 1,2014.The vacation home rules that limit the amount of the deduction to the rental income will apply and the adjusted basis for depreciation is $390,000.

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The adjusted basis for depreciation is $390,000,the lower of Beulah's adjusted basis of $450,000 or the fair market value of $390,000 on the date of the conversion.However,additional data are necessary to determine whether the vacation home gross income ceiling on deductions rule applies.If the qualified rental period exception applies,the gross income limit does not apply.If the qualified rental period exception does not apply,then the gross income limit does apply.

Beulah's Personal Residence Has an Adjusted Basis of $450,000 and a Fair