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, 2012.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.

Question

Quizplus · Accepted Answer

The adjusted basis for depreciation when converting a personal residence to rental use is the lesser of the property's adjusted basis or its fair market value at the time of conversion. Therefore, the basis for depreciation is $390,000, but the vacation home rules do not apply in this context.

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