Dana purchases an automobile for personal use for $27,000. After using it for three years, Dana converts the automobile to business use when the fair market value is $19,000. What is Dana's basis for depreciation purposes?
A)$- 0 -
B)$19,000
C)$27,000
D)The automobile cannot be depreciated.

Question

Quizplus · Accepted Answer

When Dana converts the automobile to business use, the basis for depreciation purposes would be the lower of the fair market value at conversion ($19,000) or the original cost ($27,000), which is $19,000. Therefore, the answer is option B.

Dana Purchases an Automobile for Personal Use for $27,000