1. 210 POINTS
    Barry Goldwater
    Principal, Goldwater Financial Group, Boston
    An ESOP is a retirement plan, indeed, especially for the owner. AN ESOP is a very creative way for an owner to buy himself/herself out of the company, using borrowed money that the company has to pay back. And the payback is tax deductible. For the employees, the ESOP stands for Employee Stock Ownership Plan and the stock in an ESOP is qualified money, meaning it grows tax deferred and is tax upon liquidation. WHen an employee leaves the company, he/she can roll over the ESOP money into an individual IRA
    Answered on June 22, 2013
  2. 0 POINTS
    David RacichPRO
    Fountain Hills, Arizona
    The IRS as well as the Department of Labor oversees ESOPs. The employee stock ownership plan was established under the IRC section 401(a) qualified defined contribution plan as a stock bonus or money purchase plan as defined under IRC section 4975(e)(8) to meet regulatory requirements. It is a great option for employees to purchase the business they work for from their retiring employer. 
    Answered on June 22, 2013
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