What is the basis of property converted from personal-use to business-use?

The basis of property converted from personal use to business use is typically its fair market value (FMV) at the time of conversion. This value becomes the new basis for depreciation and other tax calculations. If the property's adjusted basis (original cost minus any depreciation taken) is lower than its FMV at conversion, the FMV is used to prevent the deduction of a loss. This ensures that the taxpayer does not benefit from a loss incurred while the property was used for personal purposes.