What About a Family Business?
When 50 percent or more of a business is owned by individuals who are members of the decedents family, or if they are natural objects of his or her bounty, the buy-sell agreement will be disregarded for federal estate tax purposes, unless the agreement (1) has a bona fide business purpose, (2) is not a testamentary device to transfer property to family members for less that fair market value, and (3) has terms comparable to those entered into by parties in an arms' length transaction.
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