Question: Koch traded Machine 1 for Machine 2 when the fair market value of both machines was $ 4 9 , 8 5 0 . Koch

Koch traded Machine 1 for Machine 2 when the fair market value of both machines was $49,850. Koch originally purchased Machine 1 for $75,300, and Machine 1's adjusted basis was $40,150 at the time of the exchange. Machine 2's seller purchased it for $64,850 and Machine 2's adjusted basis was $55,150 at the time of the exchange. What is Koch's adjusted basis in machine 2 after the exchange?
Multiple Choice
$40,150
$49,850
$55,150
$75,300
None of the choices are correct.

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