American College Exam HS330 Topic 1 Question 68 Discussion

Actual exam question for American College's HS330 exam

Question #: 68
Topic #: 1

Which of the following statements concerning the valuation of intangible personal property in the gross estate of a decedent is correct?

AIf there were no trades of a listed common stock on the date of the stockholder's death, the stock's value is based on its average daily price for the previous month prior to the shareholder's death.

BCertain U.S. Treasury bonds that are used to pay federal estate taxes at par are valued at their market price on the date of death of the owner.

CWhen a minority stockholder in a closely held corporation dies, his stock is valued on the basis of the ''blockage'' rule.

DValuing closely held stock requires the consideration of several factors outlined by IRS rulings.

Show Suggested Answer

Suggested Answer: D

by Denise at Mar 30, 2023, 11:56 PM

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Tijuana

1 months ago

B is not correct. Certain U.S. Treasury bonds used to pay federal estate taxes are valued at par, not their market price on the date of death.

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Tori

14 days ago

D) Valuing closely held stock requires the consideration of several factors outlined by IRS rulings.

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Charlie

16 days ago

C) When a minority stockholder in a closely held corporation dies, his stock is valued on the basis of the 'blockage' rule.

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Mammie

17 days ago

A) If there were no trades of a listed common stock on the date of the stockholder's death, the stock's value is based on its average daily price for the previous month prior to the shareholder's death.

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Marylyn

2 months ago

Haha, I bet the IRS has a field day trying to figure out the value of that closely held stock. Better call in the accountants for that one!

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Cassi

7 days ago

Definitely a job for the accountants to figure out the value of that stock.

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Malika

22 days ago

I heard they have to consider a lot of factors according to IRS rules.

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Fletcher

24 days ago

Yeah, valuing closely held stock can get pretty complicated.

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Malcolm

2 months ago

A is not correct. If there were no trades of a listed common stock on the date of the stockholder's death, the stock's value is based on the average of the high and low prices on the valuation date, not the previous month.

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Jamal

12 days ago

Thanks for clarifying that. It's important to understand the correct valuation methods for intangible personal property in the gross estate of a decedent.

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Jaime

17 days ago

D is correct too. Valuing closely held stock requires consideration of factors outlined by IRS rulings.

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Sharika

1 months ago

C is also correct. When a minority stockholder in a closely held corporation dies, his stock is valued on the basis of the 'blockage' rule.

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Jina

1 months ago

B is correct. Certain U.S. Treasury bonds used to pay federal estate taxes at par are valued at their market price on the date of death.

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Bok

2 months ago

But what about option A? It seems reasonable to use the average daily price for the previous month.

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Makeda

2 months ago

D is the correct answer. The valuation of closely held stock requires the consideration of several factors outlined by IRS rulings, such as the company's financial condition, earning capacity, and market for the stock.

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