Other Retirement Plan Strategies
ESOP Trust Transactions
An Employee Stock Ownership Plan (ESOP) is a type of tax-qualified Defined Contribution retirement plan, in which employees have partial ownership of your business.
What are the advantages of an ESOP?
- Attract, reward, and retain employees
- Buy out one or more owners
- Create a more motivated workforce
- Raise capital or build debt capacity
- Provide a takeover defense
- Establish a market for stock in a closely held business
Valuable tax advantages
Congress has created several tax incentives that make ESOPs beneficial, including:
- Tax-deductible contributions may be used to acquire company stock
- Private companies may be able to defer capital gains
- Companies may be able to deduct dividend or lower tax liability
- Participants may experience tax-deferred retirement savings