Answer:
Koch's adjusted basis in machine 2 after the exchange is $60,000
Explanation:
given data
fair market value = $60,000
originally purchased Machine 1 = $76,900
Machine 1 adjusted basis = $40,950
Machine 2 seller purchase = $64,050
Machine 2 adjusted basis = $55,950
solution
As he exchanged machine for another at $60,000
and this exchanged in fair market
so adjusted basis = $50,000
Adjusted basis is the price of the item that affects the factors that are considered price. These factors usually include taxes, depreciation value, and other costs of acquiring and maintaining a given item. Adjusted basis is important so the right amount to sell
Adjusted basis increases when a person deducts expenses from factor taxes and operating statements
so Koch's adjusted basis in machine 2 after the exchange is $60,000
