contestada

Green Corporation's assets are valued at $1,278,000 after payment of all corporate debts, except for $191,700 of taxes payable on net gains it recognized on the liquidation. Bruno, an individual and the sole shareholder of Green, has a basis of $67,095 in his stock.

Required:
Compute the gain or loss recognized by Bruno on the liquidation of Green Corporation.

Respuesta :

abiolataiwo2015

Answer:

$1,019,205 gain

Explanation:

Computation of gain or loss recognized by Bruno on the liquidation of Green Corporation:

Amount ($)

Market value of assets $1,278,000

Less: Tax liability ($191,700)

Amount realized $1,086,300

($1,278,000-$191,700)

Less: Stock Basis ($67,095)

Gain Recognized $1,019,205

($1,086,300-$67,095)

Therefore, gain of $1,019,205 is recognized by Bruno on the liquidation of Green Corporation.