The Basis of Personal Use Property Converted to Business Use

question 284

Multiple Choice

The basis of personal use property converted to business use is:

• A) Always the lower of its adjusted basis or fair market value on the date of conversion.
• B) Always its adjusted basis on the date of conversion.
• C) Always its fair market value on the date of conversion.
• D) Always the higher of its adjusted basis or fair market value on the date of conversion.
• E) None of the above.

---

Definitions:

Financial Institution

An organization that provides financial services to its clients or members, such as banks, credit unions, and insurance companies.

Discount Rate

The interest rate charged by central banks on loans to commercial banks, influencing monetary policy and economic conditions.

Federal Funds Rate

The interest rate at which depository institutions lend reserves to other depository institutions overnight, crucial for monetary policy in the United States.