Burton Company acquired new machinery by performing professional services worth $8,250 for the seller of the machinery. Burton's tax basis in the machinery is $8,250.

Question

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This transaction is an example of a barter exchange, where two parties exchange goods or services of equal value without involving cash. The tax basis of the machinery would be the fair market value of the professional services provided by Burton, which is $8,250.

Burton Company Acquired New Machinery by Performing Professional Services Worth