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24 December, 00:49

An individual client asks a CPA to determine whether the client is solvent for federal tax purposes. The client has assets consisting of cash and marketable securities with a basis of $250,000 and a fair market value of $155,000. The client has liabilities of $175,000, which include $130,000 of non-dischargeable liabilities under the Bankruptcy Code. Which of the following statements is correct?

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  1. 24 December, 02:40
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    The client is insolvent since the client's liabilities exceed the fair market value of the client's assets by $20,000
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