Practice Quiz

Financial Planner

Category - Estate Planning

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Stock can be given as a gift. However, what percent of the adjusted gross estate must be kept to qualify for the Section 303 redemption?
  1. 40 percent.
  2. 35 percent.
  3. 50 percent.
  4. 10 percent.
Explanation
Answer: B - Thirty-five percent of the adjusted gross estate must be kept to qualify for the Section 303 redemption. This amount ensures that not too much stock is given away. If an estate retains too little closely held stock, it may fail the percentage tests that qualify it for privileged treatment with in the Section 303 redemption or for the Section 6166 installment payment of estate taxes.
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