BENEFITING FROM UNIQUE ATTRIBUTES OF ESOPS

An employee stock ownership plan (ESOP) is a stock bonus plan or a combination of a stock bonus plan and money purchase pension plan. This type of plan is designed to invest primarily in stock of the employer. Contributed cash is used to purchase the corporation's stock or retire debt incurred...

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Bibliographic Details
Published in:The Tax Adviser 2012-05, Vol.43 (5), p.346
Format: Article
Language:English
Subjects:
Alternative minimum tax
Closely held corporations
Compensation
Court decisions
Disclosure
Employee stock ownership plans
Employers
ERISA
ESOP
Federal court decisions
Retirement plans
Shareholder voting
Stockholders
Tax planning
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Summary:An employee stock ownership plan (ESOP) is a stock bonus plan or a combination of a stock bonus plan and money purchase pension plan. This type of plan is designed to invest primarily in stock of the employer. Contributed cash is used to purchase the corporation's stock or retire debt incurred to acquire the corporation's stock. Assuming all the technical requirements are met, the corporation's contributions to the ESOP are tax deductible. The general qualified retirement plan rules regarding minimum participation, nondiscrimination, and vesting apply equally to ESOPs.
ISSN:0039-9957