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

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Eileen

5 days 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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Twana

8 days 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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Veronique

11 days 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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