employee stock ownership plan (esop) tax shelters

Employee Stock Ownership Plan (ESOP) tax shelters refer to legal strategies employed by companies to mitigate their tax liabilities. These plans establish a trust that holds company stock on behalf of employees. By allocating a portion of the company's profits to this trust, the company can deduct these contributions from its taxable income. Additionally, employees who receive stock through an ESOP are generally not taxed on the stock until they sell it, potentially allowing for tax deferral or reduction. Overall, ESOP tax shelters provide companies with tax advantages and employees with potential tax benefits.

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