On the 1/16 transaction, the FMV was used as the basis to record the transaction. Support this with an excerpt from an IRS publication citing this reasoning. (HINT: search on topic: property changed from personal use). Copy excerpt into Word document and highlight answer.
What will be an ideal response?
Truck to be recorded at FMV at date of change of use.
From IRS Publication 946:
Property changed from personal use. If you held property for personal use and later use it in your business or income-producing activity, your depreciable basis is the lesser of the following.
?
a) The fair market value (FMV) of the property on the date of the change in use.
b) Your original cost or other adjusted basis.
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