Which of the following statements is correct regarding buy-sell agreements? Group of answer choices The agreement...

Which of the following statements is correct regarding buy-sell agreements?

Group of answer choices

The agreement must be funded with property or insurance.

If the corporation is designated as the owner and irrevocable beneficiary of any life insurance policy used to fund the buy-sell agreement, the death benefit from the policy is not includible in the decedent shareholder’s gross estate.

With an entity-redemption buy-sell agreement, life insurance premiums paid by the entity are deductible by the corporation.

In a cross-purchase buy-sell agreement funded with life insurance, the entity purchases life insurance on the lives of each owner.

Solutions

Expert Solution

Ans If the corporation is designated as the owner and irrevocable beneficiary of any life insurance policy used to fund the buy-sell agreement, the death benefit from the policy is not includible in the decedent shareholder’s gross estate.

Buy-sell agreement nedd not be funded with life insurance. Life insurances are also not deductoble. In cross purchase agreement the owners purchase life insurance on the life of other owners.

jeff jeffy answered 1 year ago

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