In a redemption to pay death taxes, stock in corporations in which the decedent held a 20% or more interest is treated as stock in a single corporation for purposes of determining whether the value of stock owned by the decedent exceeds 35% of the value of the decedent's adjusted gross estate.

Question

Quizplus · Accepted Answer

This is true as per the provisions of Section 6166 of the Internal Revenue Code. The redemption of stock held in corporations in which the decedent held a 20% or more interest is subject to certain limitations, including the requirement that the value of the redeemed stock cannot exceed 50% of the decedent's adjusted gross estate. In addition, for purposes of determining whether the value of the decedent's stock in such corporations exceeds 35% of the value of the decedent's adjusted gross estate, the stock is treated as stock in a single corporation.

In a Redemption to Pay Death Taxes, Stock in Corporations