The benefits from an ESOP can provide meaningful value to the selling shareholder(s), the company and the employees participating in the Employee Stock Ownership Plan (ESOP). Tax issues should not drive the decision to sell a business, but once the decision is made, the tax benefits of the ESOP make it a viable alternative to selling to a strategic buyer. This white paper takes a close look at the IRS section 1042 capital gains tax deferral that applies when selling a business to an ESOP.