What is Koch adjusted basis in machine after the exchange

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Question - Peptin traded machine 1 for machine 2 when the fair market value of both machines was $50,000. Peptin 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 the choices are correct.

Reference no: EM133037339

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