Homework Answers
ANSWER = A) $ 85,000
When a personal residence is converted to business use, its basis for depreciation is the lower of
(a) the adjusted basis on the date of conversion, or
(b) the property’s fair market value (FMV) at the time of conversion
Trey's basis for depreciation is : $ 85000
the adjusted basis on the date of conversion = $85,000 or
the property’s fair market value (FMV) at the time of conversion = $127,500
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