Family Corporation, a Corporation Controlled by Buddy's Family, Redeems All

question 80

Multiple Choice

Family Corporation, a corporation controlled by Buddy's family, redeems all of Buddy's stock. For the redemption to be treated as a sale, which one of the following conditions must be met?

• A)Buddy cannot be a creditor of the corporation after the redemption.
• B)Buddy cannot be an officer of the corporation after the redemption.
• C)Buddy cannot acquire an interest, even by inheritance, for 10 years unless the bequest was made prior to the redemption.
• D)Buddy must have purchased the redeemed stock from a person whose stock ownership would be attributed to Buddy.

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Definitions:

Heterosexual Families

Families in which the adults in a parenting role are of different sexes, traditionally recognized as a male-female couple.

Blended Family

A family unit where one or both partners have children from previous relationships, blending families together.

Custodial Parent

The parent awarded the majority of time and responsibility for a child by a court of law following a separation or divorce.

Stepparent

An individual who is married to a person with children from a previous relationship and who may take on parental responsibilities for those children.