At the Time of Her Death,Sally Was a Shareholder in Oriole

question 150

Multiple Choice

At the time of her death,Sally was a shareholder in Oriole Corporation.In valuing the Oriole stock included in Sally's gross estate,the IRS contends that the corporation possessed considerable goodwill.In disputing this contention,which of the following point(s) is/are relevant?

• A)To provide financing, Oriole has been obtaining its working capital from the shareholders at an above market rate of interest.
• B)The rate of return used by the IRS for the type of business involved is too low.
• C)Average net profit figures include large losses from unrelated investments.
• D)Sally was not an employee of Oriole but was merely a passive investor.
• E)None of the above.

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Definitions:

Financial Benefits

These are monetary gains realized by individuals or organizations, such as increased revenue, reduced costs, or improved profitability.

Canadian CEOs

Chief Executive Officers operating within Canadian companies, responsible for making strategic decisions and driving organizational success within the context of Canada's economy and regulatory environment.

Planning

The process of setting goals, developing strategies, and outlining tasks and schedules to achieve those goals.

Operating Synergy

The increased efficiency or added value that results when two companies combine their operations.