Preparing for a close - Case Study

Preparing for a close by Jackie Salmon an ESOP Advisor.

A new ESOP was preparing for its closing. The 100% owner was trying to decide whether to take
a 1042 election and defer the capital gains (which would mean that he and his son would be excluded from participating in the ESOP) or to not take 1042 and be included in the ESOP with his son. The financial advisor asked us to project the next 25 years of allocations to the owner and his son as compared to them not being included in the ESOP. We were given census data and a future stock price projection, the amount of the loan, and number of shares to do our projection. We created a spreadsheet and did this projection to the satisfaction of everyone, and it allowed the owner to make a good financial decision.