1042 TAX STRATEGIES

Unlock the full potential of your ESOP exit with 1042

Proprietary Tax Deferral Solutions for Maximum ESOP Value

Section 1042 allows business owners to sell tax-deferred and ultimately tax-free. 

As the most sophisticated tax strategists in the ESOP community, our team has saved clients millions by applying an exclusive strategy—far outpacing other inflexible and costly solutions.

Explore how our approach will help you maximize your ESOP exit and secure your financial future.

What you need to know about Section 1042

What is 1042?

What is 1042?

Internal Revenue Code Section 1042 allows shareholders to sell their company to an ESOP and defer—and ultimately eliminate—the capital gains tax on the sale. This well-established tax strategy can significantly increase after-tax proceeds, potentially saving up to 33% in combined federal and state taxes.
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Why does Section 1042 exist?

Why does Section 1042 exist?

Section 1042 is a powerful tool Congress uses to help business owners sell to employees through ESOPs and drive reinvestment into the U.S. economy—all while strengthening employee retirement security.
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How do you defer capital gains taxes under Section 1042?

How do you defer capital gains taxes under Section 1042?

To defer capital gains taxes under a 1042 election, business owners must reinvest sale proceeds into Qualified Replacement Property, which typically consists of stocks or bonds from domestic corporations actively involved in business operations.
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The Lazear Difference

Lazear’s proprietary 1042 solution provides significant benefits versus the traditional structure of floating rate notes.

Connect with a 1042 tax strategist

Maximize the power of your ESOP with our proprietary 1042 tax solution, designed to defer capital gains and ultimately save our clients millions compared to alternative solutions.

Nationwide expertise

Our unique approach combines decades of expertise in finance, taxation and ownership transition paired with an in-depth understanding of the ESOP process to create a tailored 1042 solution.

Get an Insider’s Look

THROUGH PODCASTS, VIDEOS, AND MORE–WE GIVE BUSINESS OWNERS AN INSIDER’S LOOK INTO THE EXCITING POSSIBILITIES ESOPS CAN OFFER YOUR EMPLOYEES, YOUR FUTURE, AND THE FUTURE OF YOUR WEALTH.

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