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Koch traded machine 1 for machine 2 when 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?
Liking
A feeling of affection or fondness towards someone or something, often characterized by positive regard and enjoyment.
Mental Representation
The mental imagery of things that are not currently seen or sensed by the sense organs.
Novel Situation
An unfamiliar or new circumstance that an individual encounters, which may require adaptation or new responses.
Concepts
Abstract ideas or general notions that exist in the mind as representations of categories of objects, events, or qualities.
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