Alex begins using his automobile for business purposes in his new job. The auto cost $25,000 and

Question:

Alex begins using his automobile for business purposes in his new job. The auto cost $25,000 and has a fair market value of $9,000 on the date of the conversion to business use.
a. What is Alex’s initial basis in the automobile? Explain.
b. What is Alex’s basis for computing depreciation on the automobile? Explain.