Koch traded Machine 1 for Machine 2when the fair market value of both machines was $50,000. Koch originally purchased Machine 1 for $75,000, and Machine 1's adjusted basis was $40,000 at the time of the exchange. Machine 2's seller purchased it for $65,000 and Machine 2's adjusted basis was $55,000 at the time of the exchange. What is Koch's adjusted basis in Machine 2 after the exchange?
A)$40,000.
B)$50,000.
C)$55,000.
D)$75,000.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

The Answer of Koch traded Machine 1 for Machine 2when the fair market value of both machines was $50,000. Koch originally purchased Machine 1 for $75,000, and Machine 1's adjusted basis was $40,000 at the time of the exchange. Machine 2's seller purchased it for $65,000 and Machine 2's adjusted basis was $55,000 at the time of the exchange. What is Koch's adjusted basis in Machine 2 after the exchange?
A)$40,000.
B)$50,000.
C)$55,000.
D)$75,000.
E)None of the choices are correct.

Koch Traded Machine 1 for Machine 2when the Fair Market