BTCISP1969
Dec 8 2000, 08:33 PM
When a shareholder sells his stock to the ESOP and elects the 1042 tax treatment, can he also participate in the ESOP shares at a later time?
BTCISP1969 ---
Check out IRC Section 409(n), which imposes strict limitations on the allocation of "1042 shares" to an individual who makes a 1042 election.
To the extent that the ESOP allocates shares (or other amounts) which are not covered by Section 409(n), the shareholder might be eligible to participate in the ESOP.