ESOPs (Portfolio 354)

Description

Bloomberg Tax Portfolio, ESOPs, No. 354, describes the federal income tax consequences of establishing and maintaining an Employee Stock Ownership Plan (ESOP) under §401(a) and a leveraged ESOP under §409 and 4975. The Portfolio covers the requirements for initial and continuing qualification under §401(a). The Portfolio also examines the ESOP incentive provisions contained in tax legislation. Finally, the Portfolio covers uses of funds or securities contributed to a leveraged ESOP and techniques for using a leveraged ESOP to provide financing to the employer corporation or as an alternative to a corporation’s redemption of outstanding securities. For federal tax consequences that are not unique to ESOPs, but are common to other qualified retirement plans, see 351 T.M., Plan Qualification—Pension and Profit-Sharing Plans; 352 T.M., Specialized Qualified Plans—Cash Balance, Target, Age-Weighted and Hybrids; and 370 T.M., Qualified Plans—Taxation of Distributions.

Table of Contents

I. Introduction
II. Basic Requirements of an ESOP
III. Tax Attributes of ESOPs
IV. ERISA Fiduciary Rules
V. Leveraged ESOP Transactions
VI. Special Considerations