In connection with a ’buy-sell’ agreement funded by a
cross-purchase insurance arrangement, business associate Adam
bought a policy on Burr’s life to finance the purchase of Burr’s
interest. Adam, the beneficiary, paid the premiums and retained
all incidents of ownership. On the death of Burr, the insurance
proceeds will be

Includible in Burr’s gross estate, if Burr owns 50% or
more of the stock of the corporation.
Includible in Burr’s gross estate only if Burr had purchased
a similar policy on Adam’s life at the same time
and for the same purpose.
Includible in Burr’s gross estate, if Adam has the right
to veto Burr’s power to borrow on the policy that Burr
owns on Adam’s life.
Excludible from Burr’s gross estate.