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American College Exam HS330 Topic 1 Question 82 Discussion

Actual exam question for American College's HS330 exam
Question #: 82
Topic #: 1
[All HS330 Questions]

Generally the courts will accept as the federal estate tax value of a closely held corporate business the price established by a buy-sell agreement if all the following conditions are met EXCEPT:

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Suggested Answer: A

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Johnna
4 months ago
Exactly, let's review the remaining options and see which one does not meet the criteria for the courts to accept the federal estate tax value.
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Long
4 months ago
So, we can eliminate options A) and D) as they are conditions that need to be met. That leaves us with options B) and C) to consider.
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Jennie
4 months ago
I believe that option D) is also a condition that must be met for the courts to accept the federal estate tax value.
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Lemuel
4 months ago
But what about option D) The agreement requires a shareholder to first offer his stock to the corporation or other shareholders at the specified price if he wishes to sell it during his lifetime?
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Jennifer
4 months ago
I agree, because if liquidated damages are involved, it may affect the true value of the stock.
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Norah
4 months ago
I think the correct answer is A) The agreement requires the payment of liquidated damages to the survivors if the executor fails to carry out its terms.
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Barbra
5 months ago
Hmm, I see your point. But I still think it could also be A, as liquidated damages might impact the acceptance of the value.
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Rochell
5 months ago
I agree with Ciara, the answer is definitely C. It doesn't make sense for the courts to accept that condition.
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Ciara
6 months ago
I disagree, I believe the answer is C. The courts wouldn't accept a value if the deceased shareholder's executor is required to sell the stock at a specified price.
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Barbra
6 months ago
I think the answer is A. The courts wouldn't accept a value if there are liquidated damages involved.
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