Question

If property that has been converted from personal use to business use has appreciated in value, its basis for gain will be the same as the basis for loss.

a. True
b. False

Answer 1

False. The basis for gain will be greater than the basis for loss for property that has appreciated in value after being converted from personal use to business use.

Step-by-step explanation:

False. If property that has been converted from personal use to business use has appreciated in value, its basis for gain will be greater than its basis for loss. This is because the basis for gain is the original cost of the property plus any improvements made, while the basis for loss is only the original cost of the property. For example, if a property was purchased for $100,000 and then converted to business use, and it appreciated to $150,000, the basis for gain would be $100,000, while the basis for loss would also be $100,000.