Question from old exam - list their liquidity requirements in the upcoming year.
from the text their living expenses were $220,000 and their desire to maintain a cash balance of $250,000. However, within the information provided they were going to sell their business for $10,000,00 that had zero cost basis and tax rate applied to the sale was 15%.
So for my answer I listed:
$220,000 in net living expenses + $250,000 in cash balance + $1,500,000 for taxes due on the sale of the business.
However, the CFAI did not list the $1,500,000 for taxes on the sale of their business.
Would my answer be wrong? Why would they not need to maintain another $1,500,000 in liquidity to pay for their taxes on the sale of the business?