If Personal Use Property Is Converted to Business Use

question 115

Multiple Choice

If personal use property is converted to business use:

• A)Gain is recognized on the date of conversion to the extent of the excess of the fair market value over the adjusted basis.
• B)Loss is recognized on the date of conversion to the extent of the excess of the adjusted basis over the fair market value.
• C)The basis for gain is the lower of the taxpayer's adjusted basis or the fair market value at the date of conversion.
• D)The basis for loss is the taxpayer's adjusted basis on the date of conversion.
• E)None of the above is correct.

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Definitions:

Glocalization

A portmanteau of globalization and localization, describing how global practices are adapted to local cultures and environments.

Homogenization

The process by which cultures, customs, or items become uniform and similar, often as a result of globalization, leading to the reduction of cultural diversity.

McWorld

A term referring to the globalization of markets, where cultural, economic, and lifestyle homogenization occurs globally.

Anti-globalization

A social movement that opposes the global integration of economies, arguing it leads to the erosion of local cultures, exploitation of workers, and environmental degradation.