1042 QRP from ESOP

A question has come up in regards to a 1042 QRP from an ESOP.

1042 QRP looks to be a deferral technique for capital gains that are in and ESOP. And if I understand correctly may be a good option with stock that has a low basis.

A reference was made to a 3 moths prior to and 12 months after the sale to the ESOP to get the funds investing a securities that qualify. Once the securities are sold, then the capital gains tax will result. Exceptions appear to be if they securities pass to heirs or are donated to charity, in which they are passed on without capital gains.

Is this somewhat similar to the NUA concept for qualified company stock in a 401(k) plan?

I’m looking for some additional feedback and insight.

Thank you for your help in advance.



Add new comment

Log in or register to post comments