On January 2, 2019, Todd converts his house into a rental property. Todd’s basis in the house is $400,000, and its fair market value on the date of conversion is $376,000. What is Todd’s basis for purposes of MACRS cost recovery?
A. $0; because it was converted from personal use, it cannot be depreciated.
B. $376,000.
C. $388,000.
D. $400,000.
Answer: B
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