THIS IS THE THIRD PART OF A TRANSCRIPT OF WARREN BUFFETT'S SERIES OF LIVE APPEARANCES THIS MORNING (MONDAY, MARCH 3) ON CNBC'S SQUAWK BOX.

ERIC JONES (question on tape): My name is Eric Jones from Los Angeles, California. Mr. Buffett, with spring football right around the corner, what's your prediction with Nebraska football?

QUICK: OK, there's the question for you, Warren.

BUFFETT: That's an easy one. We've got Tom Osborne back as athletic director, Bo Pelini, we've got a lot of talent. We should win at least eight games. If--it was getting kind of desperate around here a year or two ago. The coach was asking for a fullback prospect that was 6'4" and weighed 120 pounds. And people said, `Well, that's kind of a strange definition for a fullback.' And it is the only kind of guy that can get through the holes when the line opens up. Well, we have a little stronger team this year. We'll do all right.

QUICK: OK. Another question from a viewer. This comes from Tony in Springfield, New Jersey. He says, `I'm getting a tax rebate and I would like to invest it. Which of these do you think is the better bet? Number one, bet it all on the hard eight,' straight at Atlantic City, I guess. `Number two, buy a lottery ticket. Or number three, invest in Ambac.

CNBC has scheduled a one-hour special program on Buffett's unprecedented Squawk Box appearences. 

It's called Warren Buffett - The Billionaire Next Door: Face to Face.  It will be hosted by Becky Quick and airs tonight, Monday, March 3 at 9pm ET.

BUFFETT: Well, OK, I'll give him the answer. The answer's number four. Buy a no-load neutral fund with very low costs.

QUICK: OK. That's the question for him. And finally, Cara Bruder from Oklahoma City, Oklahoma, says, `My favorite charity is my children, and yours is the Gates Foundation. When I give over $12,000 to my children, I am taxed at about a 50 percent rate, yet you were taxed at nothing for giving to Gates. Why shouldn't you be taxed the same rate? Or why shouldn't I be taxed at your 0 percent rate?'

BUFFETT: Well, he's only taxed at all if he's used up his lifetime exemption. And the lifetime exemption, I think, next year goes to $3 1/2 million, and that's man and wife. So you can actually give your children, next year, over a lifetime, you can give them $7 million, and there is no tax whatsoever. So if anybody's told them that, unless he's already given $7 million, he can give a lot of money to his children. Or to his dog, like Leona Helmsley did, you would out--without paying tax. But the idea is that in one case you're doing it essentially for personal benefit, and the other you're doing it for the benefit of society.

QUICK: OK, we're going to get to a lot more questions like these. There are people who had questions about the estate tax and other issues. Plus, we have Mr. Buffett here on a very fortunate day. There's been some chaos in the markets. He's going to tell us what he's seeing right now, both in terms of the markets and the economy, from the perspective of his businesses. We have much more live from Omaha, Nebraska, with Warren Buffett right after this.

GO TO PART FOUR OF THE "ASK WARREN" SQUAWK BOX TRANSCRIPT

Transcript prepared by BurrellesLuce

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