Koch Traded Machine 1 for Machine 2

question 100

Multiple Choice

Koch traded machine 1 for machine 2. 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 these.

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Definitions:

Anion

A negatively charged ion, which is formed when an atom gains one or more electrons.

KCN

Potassium cyanide, a highly toxic compound that can release cyanide ions in solution, used in various industrial processes and, historically, in gold mining.

CN-

The cyanide ion, a negatively charged molecule consisting of one carbon and one nitrogen atom, known for its high toxicity.

Cations

Positively charged ions that are formed when an atom loses one or more electrons.