Koch Traded Machine 1 for Machine 2 When the Fair

question 81

Multiple Choice

Koch traded Machine 1 for Machine 2 when the fair market value of both machines was $49,350. Koch originally purchased Machine 1 for $76,300, and Machine 1's adjusted basis was $40,650 at the time of the exchange. Machine 2's seller purchased it for $64,350 and Machine 2's adjusted basis was $55,650 at the time of the exchange. What is Koch's adjusted basis in machine 2 after the exchange?

• A)$40,650.
• B)$49,350.
• C)$55,650.
• D)$76,300.
• E)None of the choices are correct.

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