Shareholder's sale of S corp. stock to employee as an inducement to accept employment is s. 83 transfer; does not cause corp. to have more than one class of stock
Article Abstract:
The IRS ruled in Private Letter Ruling 9525035 that stock transferred to a prospective employee of an S corporation by a shareholder at below-market value was compensation under IRC section 83. The IRS applied the bargain sale rules and deemed that the transaction occurred through the S corporation. Interest on promissory notes given in return was characterized as payments directly to the shareholder. The IRS also ruled that the transaction did not result in a violation of the one-class-of-stock rule for S corporations.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1995
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Registering sales of employer stock under an employee benefit plan using a Form S-8
Article Abstract:
Pension plans that purchase stock in the employees' employer must register the stock sale pursuant to the Securities Act of 1933, though disclosure requirements can be minimized for publicly traded companies by using Securities and Exchange Commission (SEC) Form S-8. The benefit plan summary should be revised to reflect the information needed in a stock purchase prospectus. The registration form requires the registrant to identify plan participants, available corporate information and the terms of the offering.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1995
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House passes bill to restrict promotion of ETIs for employee benefit plans
Article Abstract:
House Republicans have passed a bill limiting the ability of the Department of Labor and other federal agencies to encourage economically targeted investment (ETI) by pension trusts. Previous interpretations of ERISA have held that as long as such investments are made for economic returns and stability buying ETIs was not prohibited. House Republicans thought that the Labor department should not advise people on decisions, socially responsible or otherwise.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1995
User Contributions:
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