Selling Private Company Stock Without Paying Taxes: It Is Possible! | SG&F Law
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Selling Private Company Stock Without Paying Taxes: It Is Possible!

Author: SG&F Law

A valuable opportunity afforded to sellers of privately held company stock to an Employee Stock Ownership Plan (“ESOP”) is the ability to defer the capital gains tax on the sale of their company stock.

This article will provide a basic overview of the requirements that must be met by a Company and its selling shareholders in order to determine whether the sale of company stock to an ESOP and the selling shareholder’s election to defer recognition of capital gains on the sale under section 1042 of the Internal Revenue Code (the “IRC”) would be both feasible and desirable.