Question: Koch traded Machine 1 for Machine 2 when the fair market value of both machines was $ 5 0 , 0 0 0 .

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?
Multiple Choice
\$40,000
\$50,000
\$55,000
\$75,000
None of the choices are correct.
Koch traded Machine 1 for Machine 2 when the fair

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