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.

$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.

answer; i believe that the correct answer is client agreement;

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- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.