Koch Traded Machine 1 for Machine 2

Koch traded machine 1 for machine 2.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?

A) $40,000.
B) $50,000.
C) $55,000.
D) $75,000.
E) None of thesE.The exchange qualifies as a like-kind exchange.Since no boot was transferred,Koch's basis in the new machine is the basis in its old machine.

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