American College Exam HS330 Topic 1 Question 86 Discussion

Actual exam question for American College's HS330 exam

Question #: 86
Topic #: 1

A married man is the sole owner of a small business with an estate tax value of $500,000. In addition, he and his wife own an office building as joint tenants with right of survivorship which they purchased five years ago. The building has an estate tax value of $1, 50, 0000. They are considering dissolving the joint tenancy and retitling the building in the name of the husband as sole owner. Which of the following statements concerning this action is (are) correct?

l. lf the husband dies first, it would be easier to qualify his estate for a Section 303 redemption of his business interest.

ll. lf the husband dies first; the probate costs of his estate could be increased.

Al only

BII only

CBoth l and II

DNeither I nor II

Show Suggested Answer

Suggested Answer: B

by Tresa at May 02, 2024, 01:38 AM

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Georgene

25 days ago

Alright, let's see... If the husband dies first, the building would be part of his estate, which could complicate the probate process. As for the Section 303 redemption, I'm not sure it would be easier, but I'll go with option C just to be safe.

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Carlene

29 days ago

Wait, they're considering dissolving the joint tenancy? Is that like a 'conscious uncoupling' for real estate? This exam question is really testing my sense of humor as well as my tax knowledge.

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Hubert

16 days ago

A: I think if the husband dies first, it would be easier to qualify his estate for a Section 303 redemption of his business interest.

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Lajuana

1 months ago

I'm going with option B. Increasing probate costs sounds like a valid concern, but I'm not convinced the Section 303 redemption would be easier. This question is making my head spin!

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Audria

2 days ago

Definitely, it's a lot to consider. But in the end, reducing potential costs is key.

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Teri

9 days ago

Yeah, I see your point. It's a tough decision to make, but minimizing probate costs is important.

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Rikki

15 days ago

I think option B is the best choice. Probate costs can really add up.

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Staci

22 days ago

I agree, option B seems like the safer option. The Section 303 redemption might not be as straightforward as it seems.

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Rodolfo

1 months ago

I think option B is the best choice. Probate costs could definitely go up if they dissolve the joint tenancy.

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Elvera

1 months ago

Hmm, this is a tricky one. I'm not sure if I agree with the logic behind option I. Wouldn't the Section 303 redemption apply regardless of the building's ownership? I'll have to think this through more carefully.

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Brigette

2 months ago

I see your point, Ernie. Having the building in the husband's name only could indeed make it easier for his estate to qualify for a Section 303 redemption.

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Ernie

2 months ago

I disagree, I believe the correct answer is C) Both l and ll.

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Ahmad

2 months ago

I think the correct answer is A) l only.

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Kara

2 months ago

Why do you think both statements are correct?

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Angella

2 months ago

I think option C is the correct answer. If the husband dies first, the business interest can be easily redeemed under Section 303, and the probate costs of his estate could increase due to the change in ownership of the office building.

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