NACVA Exam CVA Topic 6 Question 71 Discussion

Actual exam question for NACVA's CVA exam

Question #: 71
Topic #: 6

[All CVA Questions]

There are some factors that determine whether the buy-sell agreement is conclusively binding for estate tax purposes. Which of the following is/are out of those factors?

AThe agreement must restrict the transfer of the securities to the buy-sell price during the owner's life as well as at death.

BThere must be a valid business purpose for establishing the agreement

CThe value may not reflect those typical of arm's length transactions in the subject company's industry

DThe value established in the agreement must have been an adequate and fair price at the time the agreement was executed

Show Suggested Answer

Suggested Answer: B

by Geoffrey at Jul 26, 2023, 02:00 PM

Limited Time Offer

25%

Off

Get Premium CVA Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Santos

3 months ago

I'm just glad I don't have to worry about estate taxes. I plan on living forever, or at least until the sun explodes. Whichever comes first.

upvoted 0 times

...

Elizabeth

3 months ago

Option D is the correct answer. The value established in the agreement must be fair and adequate at the time of execution. Simple as that!

upvoted 0 times

Freida

2 months ago

A) The agreement must restrict the transfer of the securities to the buy-sell price during the owner's life as well as at death.

upvoted 0 times

...

Nu

2 months ago

Exactly, the value needs to be fair and adequate when the agreement is made.

upvoted 0 times

...

Jordan

3 months ago

D) The value established in the agreement must have been an adequate and fair price at the time the agreement was executed

upvoted 0 times

...

Eileen

4 months ago

Wow, estate tax planning is such a thrilling topic! I can't wait to ace this question and impress my accountant. They'll be so proud of me.

upvoted 0 times

Luz

2 months ago

D) The value established in the agreement must have been an adequate and fair price at the time the agreement was executed

upvoted 0 times

...

Thea

2 months ago

C) The value may not reflect those typical of arm's length transactions in the subject company's industry

upvoted 0 times

...

Devon

2 months ago

B) There must be a valid business purpose for establishing the agreement

upvoted 0 times

...

Pedro

2 months ago

A) The agreement must restrict the transfer of the securities to the buy-sell price during the owner's life as well as at death.

upvoted 0 times

...

Kaycee

2 months ago

D) The value established in the agreement must have been an adequate and fair price at the time the agreement was executed

upvoted 0 times

...

Shayne

2 months ago

C) The value may not reflect those typical of arm's length transactions in the subject company's industry

upvoted 0 times

...

Kiera

2 months ago

B) There must be a valid business purpose for establishing the agreement

upvoted 0 times

...

Stephen

3 months ago

A) The agreement must restrict the transfer of the securities to the buy-sell price during the owner's life as well as at death.

upvoted 0 times

...

Twana

4 months ago

I'm not sure about the 'arm's length' requirement in option C. Shouldn't the value be based on the company's industry, not external factors?

upvoted 0 times

Novella

3 months ago

User 2: That makes sense, it's important for the value to be fair and reasonable based on industry standards.

upvoted 0 times

...

Marjory

3 months ago

User 1: Option C is referring to the fact that the value in the agreement should not be artificially inflated or deflated.

upvoted 0 times

...

Veronique

4 months ago

Option A seems to be the key factor. The agreement must restrict the transfer of securities during the owner's life and at death to be conclusively binding for estate tax purposes.

upvoted 0 times

...