1042 Rollover Advisors, Consultants & Advisors

Jim Massey - Morgan Stanley

1042 Rollover Advisors in Dallas, TX

Prior to joining Morgan Stanley, Jim held leadership positions with top middle-market Investment Banking firms as Founder, Director, and Head of the Houlihan, Lokey, Howard & Zukin Dallas office and led the Duff & Phelps Southwest regional office as Managing Director and City Leader....

Ann Kim - Morgan Stanley

1042 Rollover Advisors in Chicago, IL

Ann is an accomplished ESOP executive with 20+ years of experience in a multitude of industries. Prior to joining The ESOP Group at Morgan Stanley, she was the General Counsel and Chief Administrative Officer at a $500MM employee-owned company. Prior to her tenure in private industry, ...

William (Bill) Obrien - Morgan Stanley

1042 Rollover Advisors in Chicago, IL

Bill has been focusing on ESOPs and capital markets since 1989. He is Co-head of The ESOP Group at Morgan Stanley, assisting business owners and corporations, including several in the Fortune 100, in areas such as corporate liquidity transactions, business succession planning, retireme...

One of the key advisors is the wealth advisor who helps the business owner throught the ESOP transaction.  The gain on the sale of stock to a C corporation ESOP may be deferred (or eliminated) under an IRC § 1042 tax-free rollover. The tax deferral applies to sales proceeds invested in qualified replacement property (QRP). If the QRP is subsequently sold before the death of the holder, a taxable event occurs. However, if the QRP is held until the death of the holder, the QRP passes to the holder’s estate and would, in years after 2010 (unless the estate tax repeal is made permanent), receive a stepped-up basis, subject to estate tax regulations. Thus, the deferred gain would escape taxation.

All ESOP transactions are stock sales, which qualify for favorable capital gain treatment to the sellers even if the IRC § 1042 election is not available (in the case of S corporations) or not elected. This is an important advantage to using the ESOP exit strategy because many other sales of closely held companies are asset-based transactions that often produce less favorable tax results for the sellers

With some advance planning, it is also relatively easy for S corporation owners (sellers) to re-elect the C corporation status to qualify for the IRC § 1042 election. Our 1042 Rollover Advisors will help business owners and their advisors navigate through the myriad of alternatives and choices.