This panel will help attendees understand the significant requirements that a business owner must fulfill before being able to take advantage of the tax deferral options offered by IRC Section 1042. We will review how an owner of a privately held business can sell a part or all of his or her business to an ESOP and consequently defer the recognition of long-term capital gains taxes from the sale.
This session will include a high-level overview of what a 1042 rollover is and the opportunities that it provides to business owners who choose to elect it. This includes its qualifications, requirements, and common investment strategies, with deeper dives into the details of each section. The session will conclude with an interactive analysis of several relevant case studies.
Learning Objectives
1. Understand ESOP Structure and IRC Section 1042 Requirements: Learn the qualifications for electing IRC Section 1042, including ownership percentage, stock type, holding period, reinvestment criteria, and tax filings.
2. Explore Qualified Replacement Property (QRP): Identify eligible and ineligible QRP, understand triggers for capital gains tax, and learn disposition requirements.
3. Discover Diversification Strategies: Compare passive, active, and blended diversification strategies, including their portfolio outcomes and trade-offs.
