Tag: tax

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 – 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 »