Category: ESOP

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 »

ESOP – A Superb Planning Device

Introduction Employee Stock Ownership Plans (ESOPs) present the best planning opportunity for owners and managers of closely-held businesses available within our whole tax system.  Congress has long favored employee ownership and ESOP is the means it has chosen to induce more »

ESOP Feasability

Of course every situation involving ownership of closely held businesses is different and necessitates different approaches. And of course, planning alternatives abound. Some are good, yet many, if not most, will fall far short of desired goals. That’s why it’s more »

Avoid Tax!

Since 1998, ESOPs have been allowed to be stockholders in an S corporation and thereby delay any tax on their share (all when the S corporation is owned 100 percent by its ESOP) of the S corporation’s taxable income until more »