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Firm News

Peter Jones Quoted in Business Insider on ESOP Tax Advantages

November 5, 2021

On November 5, Peter Jones was quoted in Business Insider on the tax advantages of employee stock ownership plans (ESOPs).

“A selling shareholder may be able to defer capital gain on the sale to an ESOP,” Peter commented. “That occurs if the company is taxed as a C corporation, the seller sells at least 30% of the outstanding stock to the ESOP, and the seller then invests in qualified replacement property (generally, securities offered by American-operating companies).”

“Profits that are attributable to stock held by the ESOP ‘pass-through’ to a qualified retirement plan, and the ESOP pays no federal income tax, and even no state income tax in most states,” he added. “If the ESOP owns 100% of the stock, neither the company nor the ESOP pay any federal or, in most instances, state tax.”

Read the article here.