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SESOP: Small Business ESOP Program

What if ~

ONE tax planning tool could allow you to realize ...

ALL of these benefits?

Interested?? Read on to see how this is possible!

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The combination of an S Corporation and an ESOP, shortened to SESOP, has been possible only since January 1, 1998. This combination of entities creates the opportunity for extremely favorable income and estate tax planning. How?

1. An S Corp. is not taxed as a corporation; it is taxed by "passing through" taxable income to its shareholders.

2. An ESOP is a tax-exempt qualified profit sharing plan designed to invest in stock of the sponsor.

Together this means that~

3. If an ESOP owns stock of an S Corporation, the income attributable to that stock is tax-exempt.

Even better ~

4. If the ESOP owns 100% of the S Corporations Stock, 100% of that corporation's profits are tax-exempt.
5. A tax-exempt corporation like an ESOP can apply a part or all of its net profitability to normally non-deductible expenditures such as:
   • Purchase of another Business
   • Buyout of a Partner/Shareholder
   • Purchase of Real Estate
   • Entertainment Expenses
   • Purchase of Equipment
   • Life Insurance

Therefore ~

Properly structured, an S Corporation's owners could sell all of their stock to an ESOP, realize enormous income tax advantages and apply pre-tax dollars to the cost of life insurance used for buy-sell or estate planning purposes.

All of these benefits can be realized without loss of control of the corporation and with most or even all of the stock being allocated to the person selling to the ESOP.

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These are only a few of the benefits created by this unique combination of entities.

To find out more, contact L. T. Smith at 615-777-0777 or email to ltsmith@eaglefinancialgroup.com