When Congress set up the rules allowing S corporations to form employee stock ownership plans (ESOPs), it cut out one of the best tax planning opportunities available to C corps-the tax free roll over of the gain in the corporation’s stock value when the stock is sold to an ESOP. In Chapter 15 of the new edition of CCH’s Practical Guide to S Corporations, author Michael Schlesinger, J.D., LL.M., notes that there are still important considerations and instances where an S corp can potentially find tax advantages with ESOPs. Schlesinger outlines the use of ESOPs and shows practitioners through the opportunities and potential pitfalls in his chapter on ESOPs and S corps.
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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.
Read this article from CCH’s Journal of Taxation of Financial Products.