Catherine Travis is starting a new business. She has several assets that she wants to use in her business that she has been using personally. Because she plans to convert several assets from personal to business use, she will need to find out how much each asset is worth so she can determine her basis for depreciating the assets. Catherine has decided that getting an appraisal would be too costly$,$ so she simply uses her costs basis for the assets.

Questions for discussion include:

$1.$ What do you think of Catherine$$s strategy for determining her business asset bases?

$2.$ What is the proper basis to use for converting personal to business use and is there any justification for not using this basis?

$3.$ Are there any there any ethical issues with Catherine using historical cost for the basis?