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petitioner on January 10, 1991. Accordingly, we sustain
respondent's disallowance of the claimed moving expenses.
E. Loss on Disposition of Chevrolet Cavalier
Petitioner claimed a loss in the amount of $8,350 when the
Cavalier was traded in for the leased van. He calculated the
loss by using a cost basis of $13,500. Respondent reduced the
amount of this loss to $2,043.34. Respondent arrived at this
figure by reducing petitioner's basis in the Cavalier from the
$13,500 cost basis to the $9,627 fair market value based on the
NADA used car guide. Respondent accepted petitioner's 56 percent
business use of the Cavalier and allocated $5,391.12 of the fair
market value basis to business use.
The basis for determining a loss on the disposition of
property used in a trade or business is "the cost * * *, except
as otherwise provided in this subchapter". Secs. 165(a), (b) and
(c), 1011, 1012. However, losses on personal property are not
deductible. Sec. 262. The depreciable basis for property
converted from personal to business use is the lesser of cost or
fair market value at the time of conversion. Sec. 1.167(g)-1,
Income Tax Regs. Thus, the basis for determining a loss under
section 165 for an automobile converted from personal to business
use is the lesser of cost or fair market value. Gross v.
Commissioner, T.C. Memo. 1972-221. To conclude otherwise would
allow petitioner through conversion to recognize a loss which was
realized during the period of personal use. Id. Therefore, we
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