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Please help with this, very appreciated. Koch traded Machine 1 for Machine 2 when the fair market value of both machines was $49,250. Koch originally
Please help with this, very appreciated.
Koch traded Machine 1 for Machine 2 when the fair market value of both machines was $49,250. Koch originally purchased Machine 1 for $76,500, and Machine 1's adjusted basis was $40,750 at the time of the exchange. Machine 2's seller purchased it for $64,250 and Machine 2's adjusted basis was $55,750 at the time of the exchange. What is Koch's adjusted basis in machine 2 after the exchange?
Multiple Choice
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$40,750.
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$49,250.
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$55,750.
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$76,500.
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None of the choices are correct.
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