S Corp ESOPs: Two Hot Topics

Goldberg, Laurence A.
October 2004
Venulex Legal Summaries;2004 Q4, p1
The article offers information on the law governing the employee stock option plans (ESOP) of subchapter S corporations in the U.S. The American Jobs Creation Act of 2004 allows the ESOP of S corporations to make loan payments through cash distributions paid on shares from loan proceeds. Under the Internal Revenue Code section 409 (p), S corporations sponsoring ESOP are subject to an excise tax. Excise tax is applicable if 50% or more of an S corporation stock is owned by disqualified persons.


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