Among the assets in a decedent’s gross estate is stock in a closely held corporation that was left to a nephew. The interest passing to the nephew is required to bear the burden of all estate taxes and expenses. The relevant facts about this estate are as follows:
Adjusted Gross estate $3,000,000
Fair market value of stock in the closely held 25,000 corporation
Administration and funeral expenses 100,000
State inheritance taxes 0
Federal estate taxes 0
What amount of closely held corporate stock may be redeemed under IRC Sec. 303 so that redemption will be treated as a sale or exchange rather than a dividend distribution?
(A) $0
(B) $70,000
(C) $130,000
(D) $200,000