Author: Lou Diamond

ESOP 1042 Pros vs. Cons

The principal 1042 Pro is the tax-free sale potential (see Appendices 1 and 2 below). The main Cons are (1) the sellers, their family and other 25% stockholders cannot share in the allocation of that 1042-purchased stock inside the ESOP more »

The Tax-Free Sale

Internal Revenue Code (IRC) Section 1042 allows a tax-free rollover of gain by a stockholder who sells stock to an ESOP sponsored by a closely-held C corporation.  There are a number of requirements that must be met, but when they more »

ESOP Misconceptions

Despite all of these advantages, ESOPs are not implemented as frequently as you might think, and when ESOP is mentioned advisors not adequately familiar with ESOPs have a tendency to denigrate them by inaccurately depicting them.  I refer to these more »