Question - Kochi traded machine 1 for machine 2. Kochi 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 Kochi'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