by: Vira, Damien
Source: The Beyster Institute
The shareholder of a C corporation can defer or eliminate capital gains taxes when he or she sells stock to an employee stock ownership plan (ESOP). To accomplish this, the selling shareholder must elect Section 1042 of the IRS Code and meet all the requirements therein. One of the requirements of the 1042 election is that the seller reinvest (rollover) the sale proceeds into qualified replacement property (QRP). This article will define and detail QRP and its requirements.
Link: Section 1042: A Guide to Qualified Replacement Property
Publication Date: 2015-03-09