American College Exam HS330 Topic 1 Question 79 Discussion

Actual exam question for American College's HS330 exam

Question #: 79
Topic #: 1

All the following statements concerning an entity-purchase buy-sell agreement for a partnership are correct EXCEPT:

AThe partnership makes payments to the decedent-partner's estate to liquidate the partnership interest held by the estate.

BBoth the partners and the partnership are parties to the agreement that provides for business continuation.

CIt is the surviving partners who purchase the decedent's business interest so that the partnership can afford to pay the decedent's estate.

DThe partnership, in effect, liquidates the interest held by the decedent-partner's estate.

Show Suggested Answer

Suggested Answer: D

by Yolando at Dec 23, 2023, 05:45 PM

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Fairy

1 months ago

This question is making my head spin. Maybe the correct answer is to just quit my job and become a professional llama herder instead.

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Lorrine

1 months ago

I'm pretty sure the answer is A. The partnership makes the payments to the decedent-partner's estate, not the other way around.

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Jerry

1 months ago

Ha! This question is trying to trick us. Of course, option B is the correct answer. Both the partners and the partnership are parties to the agreement.

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Deonna

2 months ago

Hmm, I'm not sure about that. I think option D might be the right answer. The partnership is effectively liquidating the interest held by the decedent-partner's estate.

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Laquanda

1 months ago

Exactly, the surviving partners purchase the decedent's interest for business continuation.

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Tu

1 months ago

That makes sense, the partnership needs to buy out the decedent's business interest.

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Lasandra

1 months ago

Yes, the partnership does liquidate the interest held by the decedent-partner's estate.

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Julie

2 months ago

I think you're right, option D is the correct answer.

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Gabriele

2 months ago

I think option C is the correct answer here. The surviving partners are the ones who purchase the decedent's business interest, not the partnership itself.

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