Taxpayer Relief Act of 1997 Affects ESOPs, 401(k) Plans

The Taxpayer Relief Act of 1997 (the "Act"), reported on in the previous installment of this column and now about to be signed into law, contains provisions affecting employee ownership plans. The most important of these provisions makes employee stock ownership plans (ESOPs) more practical in S corporations, but other provisions affect ESOP estate planning issues and 401(k) plans.

The text of the ESOP and 401(k) provisions, as well as the other tax changes, can be found on the World Wide Web at http://thomas.loc.gov/. Search under "Bill Text" for "105th Congress" for bill number "H.R. 2014."

Note on August 11: President Clinton signed the bill on Tuesday, August 5. He had until Monday, August 11, to exercise his line-item veto power. When August 11 came, none of the employee ownership-related provisions were the subject of the President's line-item vetos.