An employee stock ownership plan (ESOP) is a powerful tool that can greatly benefit both employees and their employer. When an ESOP owns an S corporation, it is partially or wholly exempt from federal income taxation (and possibly state taxation, depending on the state), making it an even more powerful tool in many cases. With the tax-planning possibilities offered by the S corporation ESOP structure, many companies investigate ESOPs and S corporate status. But there are many issues to deal with along the way, ranging from valuation issues to matters that arise when making the S corporation election (if the company is not already an S corporation) to dealing with the unavailability of the tax-deferred ESOP "rollover" for S corporation owners. Most importantly, however, it is imperative for any company considering or maintaining an S corporation ESOP to test its compliance with the strict anti-abuse rules for S corporation ESOPs. This book deals with all these issues and more in a clear and understandable style. This fourth edition has been updated throughout, with every chapter either being updated or (in the case of chapter 7) replaced. Additionally, a new chapter at the end of the book addresses the increasingly important and much-discussed topic of creating a sustainable ESOP company.
