As part of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), very complex S corporation ESOP anti-abuse provisions were enacted into the Internal Revenue Code in the form of new Code section 409(p).
The purpose of the ...
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ESOP Blog
The Strategic Advantage (and Compliance Risks) of S Corporation ESOPs
Employee stock ownership plans (ESOPs) have long been a powerful planning tool. For S corporations, they offer unique tax benefits — and unique pitfalls.
If you're a closely held S corporation evaluating a succession plan, shareholder liquidity ...
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Selling an ESOP Company
You are the CEO of a very successful, 100% ESOP owned S corporation. The company is profitable and running very well, paying no federal or state income taxes. The employees are happy. Out of the blue, you get an offer from a third ...
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The Top 5 “Speed Bumps” When Terminating an ESOP
When terminating a qualified retirement plan, there are undeniably many details. Once the termination and wind up of the trust process begins, questions, loose ends and other “speed bumps” can slow down the process considerably. In this article, we ...
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What Can an ESOP Invest in Other Than Company Stock?
ESOPs are not required to invest exclusively in company stock. Kevin Long explains.
It's a fundamental requirement for ESOPs that they be primarily invested in employer securities, and typically, that's the common stock of the corporation ...
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When an ESOP Company Is Sold, Who Pays the ESOP Loan?
It’s easiest to think of an ESOP loan as essentially a mortgage on the ESOP's shares held in its suspense account. If the stock is sold, the ESOP trustee will pay off the debt and then the net proceeds from the payment of that debt will be the gain ...
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