Question

g Green Corporation's assets are valued at $1,246,500 after payment of all corporate debts, except for $186,975 of taxes payable on net gains it recognized on the liquidation. Bruno, an individual and the sole shareholder of Green, has a basis of $65,441 in his stock. Compute the gain or loss recognized by Bruno on the liquidation of Green Corporation. Bruno has a recognized of $ as a result of the liquidation.

Answer 1

Bruno would recognized a gain of $994,084

Step-by-step explanation:

Data provided

Value of assets = $1,246,500

Taxes payable = $186,975

Basis of Bruno = $65,441

The computation of gain or loss recognized is shown below:-

= Amount realized - Basis of Bruno

= (Value of assets - Taxes payable) - Basis of Bruno

= ($1,246,500 - $186,975) - $65,441

= $1,059,525 - $65,441

= $994,084

So, Bruno would recognized a gain of $994,084