NACVA CVA Exam - 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

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Matthew

4 months ago

Totally agree with A and D, they make sense!

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Rima

4 months ago

Wait, does D really matter that much?

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Corazon

4 months ago

C seems off; arm's length is crucial in these agreements.

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Hyun

4 months ago

I think B is a bit overrated, honestly.

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Vannessa

5 months ago

A is definitely a key factor!

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Cristina

5 months ago

I definitely practiced questions about fair pricing in agreements, so I think D is important because it mentions the price at the time of execution.

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Karrie

5 months ago

I feel like option C is tricky; I think it relates to how the value should reflect arm's length transactions, but I can't remember if that's a requirement.

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Celestina

5 months ago

I think there was something about needing a valid business purpose for the agreement, but I can't recall the specifics.

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Adell

5 months ago

I remember discussing how the buy-sell agreement needs to restrict transfers to the buy-sell price, but I'm not sure if that applies during the owner's life too.

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Dominga

5 months ago

Definitely C. Smart Capture is designed for creating custom forms and surveys, so that's the obvious choice here.

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Mozell

5 months ago

I remember learning about IGMP general queries, but I can't recall the specifics for each version. I'll have to make an educated guess on this one.

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Shaniqua

5 months ago

This looks like a straightforward data integrity question. I think the key is to ensure that the data is properly segmented and access is restricted based on the region.

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Santos

10 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.

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Elizabeth

10 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!

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Freida

9 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.

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Nu

9 months ago

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

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Jordan

9 months ago

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

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Eileen

11 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.

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Luz

9 months ago

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

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Thea

9 months ago

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

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Devon

9 months ago

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

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Pedro

9 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.

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Kaycee

9 months ago

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

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Shayne

9 months ago

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

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Kiera

9 months ago

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

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Stephen

10 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.

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Twana

11 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?

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Novella

10 months ago

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

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Marjory

10 months ago

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

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Veronique

11 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.

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