Retirement and Other Insurance Concepts
A closely held corporation funds a buy-sell agreement so that the company itself buys a deceased shareholder's stock. What is this plan called?
Answer and explanation
Answer: D. In an entity purchase the business is the owner, payer, and beneficiary of one policy on each owner, and it redeems the deceased owner's interest. Only one policy per owner is needed.Source: Internal Revenue Service — IRS Pub. 541, entity purchase and cross-purchase agreements
More retirement and other insurance concepts questions
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