Gene purchased an SUV for $45,000 which he uses 100% for personal purposes. When the SUV is worth $30,000, he contributes it to his business. The gain basis is $45,000, the loss basis is $30,000, and the basis for cost recovery is $45,000
a. True
b. False
Indicate whether the statement is true or false
False
RATIONALE: The basis for cost recovery is $30,000 . The basis for depreciating personal use property which has been converted to income-producing property is the loss basis: the lesser of the FMV of the asset or the owner's adjusted basis in the property.
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