Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

Can ESOP be used to pay payment on a new built and avoid…

Customer Question
Can ESOP be used...

Can ESOP be used to pay for down payment on a new built and avoid large tax penalties.

Accountant's Assistant: Thanks. Can you give me any more details about your issue?

50 year o;d recieving esop money and wants to use it to fund down payment on ane built homwe and not pay all the taxes goverment

Submitted: 2 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 23 minutes by:
1/27/2016
Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,859
Experience: Taxes, Immigration, Labor Relations
Verified

An employee stock ownership plan (ESOP) is an IRC section 401a qualified defined contribution plan that is a stock bonus plan or a stock bonus/ money purchase plan. An ESOP must be designed to invest primarily in qualifying employer securities.
Beneficiaries of ESOP plans are taxed in the year that amounts are distributed or made available to them. When you receive property from an ESOP, such as stock, the amount is usually based on the property's fair market value.

Ask Your Own Tax Question
Tax Professional: Lev, Tax Advisor replied 2 years ago

So - regardless how the money are used - that distribution will be taxable for the payee.

Thus

- can ESOP distribution be used to pay for down payment on a new house - yes.

- will that allow to avoid taxable income - no;

So what to do to avoid large taxable income? - spread distribution over several years.

.
I appreciate if you take a moment to rate the answer.
Experts are ONLY credited when answers are rated positively.
If you still have any doubts, need clarification - please be sure to ask.
I am here to help you will all tax related issues.

Ask Your Own Tax Question
Was this answer helpful?
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,859
32,859 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,495 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,272 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
What are the tax responsibilities for the beneficiaries of
What are the tax responsibilities for the beneficiaries of an irrevocable trust upon the death of the grantor.… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
My taxable income is 49,000 $ yet the tax worksheet shows
My taxable income is 49,000 $ yet the tax worksheet shows 1800$ due and I cant figure how to get into Turbo Tax smart work sheet and enter 6000.00 $ which is the correct amt due on the Fed return … read more
Mark Anderson
Mark Anderson
Attorney
Doctoral Degree
10 satisfied customers
Are SREC's (Solar Renewable Energy Credits) taxable income?
are SREC's (Solar Renewable Energy Credits) taxable income? What if you have not yet finished payments on your solar panels? … read more
taxmanrog
taxmanrog
Master\u0027s Degree
941 satisfied customers
If my taxable income for 2018 will be approx. $38,000, what
If my taxable income for 2018 will be approx. $38,000, what is my tax liability filing single. ( was widowed in late 2016. When I filed for 2017, my CPA had neglected to tell me there were different t… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
What are the circumstances for a beneficiary to receive a
What are the circumstances for a beneficiary to receive a K-1 (1041)? I have been a beneficiary before but never received a KI-1. I thought the estate paid everything having to do with taxes. … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,240 satisfied customers
A client of mine is a beneficiary in a trust and the trust
A client of mine is a beneficiary in a trust and the trust has around $25K of income. The client would pay income at the individual level in her income tax thru a K-1 and the trust does not pay income… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,240 satisfied customers
I had no taxable income for 2017, but am supposed to file a
I had no taxable income for 2017, but am supposed to file a tax return in order to establish I qualified for Premium Tax Credits received through Healthcare.gov. What should I do? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
VA income tax return form 760, Line 16, “ Taxable Income -
VA income tax return form 760, Line 16 , “Virginia Taxable Income - Subtract Line 15 from Line 9” what are the two bubbles “DTD” and “LTD” ? Should I fill in one ?… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
Does Massachusetts tax Roth IRA distributions if the
Does Massachusetts tax Roth IRA distributions if the contributions were made in NY while a NY resident and withdrawn years later while a Massachusetts resident.… read more
Lev
Lev
Tax Advisor
32,859 satisfied customers
My only taxable income is $2287.10 from IRA distribution. I
My only taxable income is $2287.10 from IRA distribution. I am rated 100% VA disabled. My social security and VA pension are non-taxable. I have no other reportable income. How do I determine if I owe… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Is social security a taxable income? Indiana. None
is social security a taxable income? JA: What state is this in? It matters because laws vary by location. Customer: Indiana JA: What steps have been taken so far? Customer: none JA: Anything else you … read more
Mike-USACPA
Mike-USACPA
9 satisfied customers
Is a settlement from employment taxable income? My husband
My husband received a settlement from his employer as he was no longer able to work as a patrol officer due to injuries. He had to take medical retirement … read more
Lev
Lev
Tax Advisor
32,859 satisfied customers
Tax rate on stored company property in Theodore, Alabama and
Tax rate on stored company property in Theodore, Alabama and do you pay property tax on 100% of the value. (Stored off shore oil and gas equipment/tools)… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
How much tax do I owe on $1.350.00 taxable income. 1040A
How much tax do I owe on $1.350.00 taxable income. 1040A Line 25. … read more
Lev
Lev
Tax Advisor
32,859 satisfied customers
A mother established a trust which was to be the beneficiary
A mother established a trust which was to be the beneficiary of her IRA upon her death. Her 2 daughters are beneficiaries of the trust. Following her death the IRA was distributed to the trust. The re… read more
Lev
Lev
Tax Advisor
32,859 satisfied customers
In regard to inherited property, does the beneficiary HAVE
In regard to inherited property, does the beneficiary HAVE to use the stepped up basis or can the decedent's basis be used instead? What if you cannot determine what the basis would have been at the t… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,119 satisfied customers
BENEFICIARIES OF A SIMPLE TRUST, SOLD RENTAL PROPERTY WITH A
BENEFICIARIES OF A SIMPLE TRUST, SOLD RENTAL PROPERTY WITH A GAIN AND ORDINARY INCOME FROM DEPRECIATION RECOVERY. HOWEVER K-1s SHOW NO AMOUNTS TO REPORT. THERE IS A FEDERAL TAX BALANCE DUE FOR THE TRU… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,027 satisfied customers
What would the rate of capital gains tax on income property
what would the rate of capital gains tax on income property held for 25 years by an owner who of late had and will have income of less than20,oooIt is also my understanding we (my brother and I) are e… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,272 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x