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istructions

Question $1$

$0\mathrm{.}5$ pts

Koch exchanges business equipment with an adjusted basis of $$40,000$ for business equipment with a fair market value of $$65,000.$ If the exchange qualifes for like$-$kind exchange treatment, what is Koch's adjusted basis for the new equipment after the exchange?

$$40,000.$

$$55,000.$

$$50,000.$

None of these.

$$75,000.$

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