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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Lajuana

21 hours 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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Elvera

7 days 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

12 days 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

13 days ago

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

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Ahmad

14 days ago

I think the correct answer is A) l only.

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Kara

16 days ago

Why do you think both statements are correct?

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Angella

17 days 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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Sabina

21 days ago

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

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Kara

22 days ago

I think the correct answer is A) l only.

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