Monday, April 29, 2024
Specific Property Gifts

4.6.7 Basic Quiz -- ESOPs and Qualified Replacement Property
A business owner of a corporation can sell that stock to an employee stock option plan (ESOP) after one year of owning such stock.
     True      False
An ESOP allows a business owner to sell the business to employees without incurring a large capital gains tax immediately.
     True      False
Often, business owners contemplating an ESOP have a high basis in their company stock.
     True      False
The business owner must sell at least 50% of his or her stock to the ESOP in order for the plan to purchase qualified replacement property (QRP).
     True      False
After the owner sells some of the company stock, he or she is free to invest those proceeds in any investment.
     True      False
QRP consists of certain publicly traded stocks.
     True      False
If an owner has utilized an ESOP and now holds QRP, it is possible to use the QRP to fund a CRT and then sell the QRP without incurring any capital gains tax.
     True      False
When a business owner creates an ESOP and purchases QRP, the QRP receives a step up in basis.
     True      False
If an ESOP is created and the QRP is used to fund a CRT, the owner / donor does not receive a tax deduction for establishing the CRT.
     True      False
It is permissible for only a portion of QRP to be used to fund a CRT.
     True      False



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