Elliot Pisem and David E. Kahen Coordination of ESOP Benefits With Installment Method
The conclusion of the court that the installment sale rules continued to apply where a section 1042 election had been made is surprising and it remains to be seen whether the Commissioner will contest this result.
August 14, 2024 at 01:58 PM
9 minute read
When alternative structures to sell a closely held corporation are under consideration, a sale of stock to an employee stock ownership plan (ESOP) may offer tax benefits to the seller. Among those benefits is that a selling shareholder may, under IRC section 1042, avoid the recognition of gain by purchasing, within a specified period, "qualified replacement property" (QRP)—in general, securities issued by a domestic operating corporation.
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